Economics & Investing For Preppers
Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. In this column, JWR also covers hedges, derivatives, and various obscura. This column emphasizes JWR’s “tangibles heavy” investing strategy and contrarian perspective. Today, we look at the LMBA’s delivery crunch. (See the Precious Metals section.)
Precious Metals:
The London Bullion Market Association (LBMA) is running into a physical delivery crunch for gold contracts. There are now so many long contract holders demanding delivery that the delivery part of the LBMA’s traditional “next working day” contract settlement promise has been nullified. Deliveries are now being delayed by 60 to 75 days. Their use of rehypothecated (fractionalized) contracts is running them into serious trouble. They now have an extreme physical gold shortage. Even with just a few more contract holders now demanding delivery instead of cash, they cannot keep up with the demand. When I last checked their clearing data and vault holdings, the LMBA had only about 37 million ounces of physical gold on hand, versus 378 million ounces in pending gold contracts. (“Paper gold.”) A similar situation exists for the LBMA’s silver vault holdings. If there is an international monetary crisis or if a regional war breaks out anywhere in Asia, then a huge number of contract holders will demand physical metals delivery of both gold and silver. Ipso facto, the LBMA will surely collapse. Watch this situation closely, folks. And, more importantly, do not invest in “paper” precious metals. (Such as GLD and SLV.) And only store your physical metals at home, well-hidden! – JWR
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Will Gold Keep Rising Even as Stocks Go Up?
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Reader D.S.V. spotted this news: Costco enforces strict limit on gold bar purchases as value increases.
Economy & Finance:
From the leftist CNBC: 30-year Treasury yield jumps above 5% after Moody’s downgrades U.S. credit rating. JWR’s Comment: Well, well, well… Such doses of reality from the ratings firms certainly signal that the yield curve won’t be inverting again, anytime soon.
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Doug Casey on DOGE, Deficits, and the Coming Financial Earthquake.
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Tom Christianson flagged this UK Telegraph article: ‘Worse than Greece’: The debt crisis threatening to blow up the global economy. JWR’s Comments: In his article, Hans van Leeuwen states: “In a world of Donald Trump-induced volatility and uncertainty, bond market investors could quickly lose faith in any one of the debt-dependent governments of the West.” He seems to imply that Donald Trump (and his tariffs) are somehow the cause of the debt crisis. But the crisis has been brewing for decades. The real cause is chronic and profligate government overspending. The credit markets have become risk-averse because of doubts about creditworthiness. That is why bond yields are rising. The only genuine solution to the government debt crisis is restoring fiscal responsibility. The Federal budget must be slashed. The little DOGE spending cuts are mostly symbolic. Because Congress stubbornly refuses to end its drunken sailor spending binge, a debt collapse is inevitable. The real question is not “if?”, but “when?” I can see that the Powers That Be would rather have the collapse occur when Donald J. Trump is at the helm. Thus, they can prevent another Republican from getting elected, as Trump’s successor. In effect, they are planning another post-collapse “It was Herbert Hoover’s fault” charade. DJT will just be in the wrong place, at the wrong time.
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Jim Rogers: I Sold Almost All My Stocks – “I’ve Seen This Party Before”.
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At Wolf Street: Japan’s 30-Year and 40-Year Bonds Crater, Yields Spike, Huge Mess Coming Home to Roost. Yen Carry Trade at Risk.
Commodities:
Reported on May 19th in The Rio Times: Copper Prices Under Pressure.
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Saxo: COT Report: Broad risk reduction seen ahead of easing trade tensions.
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OilPrice News reports: Tariffs Can’t Stop the U.S. LNG Boom.
Forex & Cryptos:
The Swiss Franc has become so strong versus both the U.S. Dollar and the Euro that the Swiss National Bank (SNB) chairman is now hinting that they may push their rates to zero or even negative, presumably to protect Swiss exports. I’m glad that I took my own advice and hedged into Swiss Francs (CHF). – JWR
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At Currency Thoughts: Weakness of Bonds and Dollar Extends Further.
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Bitcoin jumps to new all-time high, surpassing prior record in January.
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JPMorgan Forecasts Bitcoin to Outperform Gold in Second Half of 2025. JWR’s Comment: In a full-blown crisis, investors will rush to genuine tangibles (like gold and silver) rather than mere conceptuals like Bitcoin.
Tangibles Investing:
Reader H.L. sent us this Hawaiian news segment: Vote recommends plan to phase out thousands of Maui short-term rentals.
H.L.’s Comment: “Apparently in Hawaii renting out your home short term has all kinds of restrictions. The fines to the owners are huge. This actually means that you really do not own your home, even if you paid off the mortgage and keep up the grounds and the home. In effect, the government owns your home. In my book that certainly resembles communism. As long as the tenants are not making excessive noise, or making a pig pen of the exterior, and you keep up the property, why should The State care if it is a short-term or long-term rental? Again, you do not really own your property.”
JWR Adds: In most Red States, folks are free to do whatever they want with their homes, unless they live inside of HOA communities. Many HOAs have restrictions on running AirBNBs or other rentals. And a few have even tried to restrict political meetings at homes, or home Bible study and prayer meetings.
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Our featured Pre-1899 Gun Of The Week, at Elk Creek Company: Winchester Model 1887 12 Gauge Lever Action Shotgun. Oh, and by the way, for anyone who wants to pay in Pre-1965 silver coinage, you may divide the price by 25. That is a very generous ratio.
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. Thanks!
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