Price Warnings Thread - Price Changes Which You Can Expect

twp

Admin, Make DuckDuckGo.com Your Search Engine.
Staff member
People and businesses who process our food, like farms, butcher shops, Warehouses are all vulnerable to the Corona Virus outbreak. I haven't heard anything about the unions to which many employees belong.
We get a fair amount of produce from Mexico. What happens if Mexico closes their border with the US?

I note that the ports hold a large number of containers and those containers are being emptied to supply the delivery pipeline in the US (probably other countries too?). What happens when those containers are empty and no more are coming in from China or Europe?

Watching these.
 

Punty

Well-Known Member
So, I am on several forums.

There are a lot of sock puppets, even people I normally think of as intelligent and independent, repeating the "damn the hoarders, these people are stupid" mantra.

I hope they don't end up wiping their arses with facecloths while they wait for government food assistance deliveries.
 

Atlas

Administrator
Staff member
It is bound to happen. Even within the prepping community there are plenty of people who have bigger mouths then pantries.

I'm hearing that a run on ammo is about to start. Get it while you can!
 

Punty

Well-Known Member
Not for nothing, but ammo is the least of my concerns. I suspect that's the case with almost everyone else on this board, too.
 

Atlas

Administrator
Staff member
I was joking.

Seriously, I hope that everyone realizes buying bulk of anything can snowball and lead to outages. That is why we are where we are with TP.
 

Punty

Well-Known Member
I'm going to hit the bank on Monday and take out cash.

There are numerous signs of the banks being in trouble. That will affect both banks and credit cards. I want cash on hand.
 

Atlas

Administrator
Staff member
Having a month or two worth of cash on hand is never a bad idea.
 

twp

Admin, Make DuckDuckGo.com Your Search Engine.
Staff member
So far, I've only read anecdotal reports of banks refusing to allow quick withdrawal of larger sums and/or closure of accounts.
No, repeat NO, reports of actual 'bank runs' outside of China.
If you find a verifiable (not just talking heads) reports of banks being hit with large numbers of withdrawal request, please post them here. Please give us some text reports, not video and not just "I heard it on the TV".
 

Punty

Well-Known Member
Let me clarify....

The signs I see are not bank runs, they are banks taking a bath on investments like oil, banks raising mortgage rates even as the Fed rates decline, stock market issues, and things of that sort. Banks are trying hard to deleverage, and reduce outflow. The reduction of outflow is concerning. Banks want to reduce mortgage lending! There is no other way to interpret that but that banks are concerned about their reserves. They are intentionally handicapping lending, which is their bread and butter....that doesn't occur in a healthy financial sector.
 

twp

Admin, Make DuckDuckGo.com Your Search Engine.
Staff member
@Punty, now I understand what you're talking about.
I've not been looking at banking trends, so I haven't seen reports about this.
If you have links to such reports, please do post them.
 

Punty

Well-Known Member
Well, the report on raising mortgage rates while the Fed rate goes down I heard on NPR.

The rest I'll bring to the board as I bump into it. I'm something of an amateur Austrian school economist, so I follow that stuff as a sort of hobby.

That's one of the reasons why I know that, should there be a banking collapse of some sort, your best investment isn't gold, it's actually silver. Gold is still the best investment as far as size and weight vs purchasing power, of course, but silver has much more upside. Traditionally, silver generally runs about 1/10 the value of gold, but in modern times, it is grossly undervalued, because of market manipulation, made possible by most precious metals investors never actually take physical possession, so the markets treat it just like they treat money....they sell many times more than they actually have. The same is done with money, which is why they call it "fractional reserve" banking. A bank with $1000 in reserves can actually lend out something around $50,000 in loans. They are only required to have 2% reserves, and nobody actually takes their loans out in cash, they simply transfer numbers on a ledger. That's why bank runs are a problem...the banks don't actually have the money they show on their balance sheets. Same thing is being done with silver, to depress the value of it, for a variety of reasons.

As for oil, in 1999 the US basically repealed the Glass-Steagal regulations which banned deposit banks from using customer deposits for risky investments, written specifically to protect people's savings. Once that was done, deposit banks suddenly became investment banks, many of which invested unwisely and that's why you have seen so much consolidation of the banking industry since 1999, big banks buy up insolvent small banks, with help from the Fed, which is owned by big banks.

This is where oil comes in. The way oil is produced, it doesn't get pumped from the ground and then sold on the market. What happens is banks contract with oil producers to purchase x number of barrels at some point in the future, so the oil producers know exactly how much oil to pump and how much they will make. The banks then own those barrels, and sell them to the fuel companies at a markup, who then sell it to consumers at a markup (overly simplistic, but fundamentally what happens).

So...what happens when there is a crash in oil prices? These banks are ont he hook to buy millions of barrels at say, $35 dollars a barrel because they projected being able to sell it for a bit more than that. But then, demand drops, and/or oil producers ramp up production beyond what the banks had anticipated, and start selling barrels at $30 to other banks, or even the same banks....so the barrels already under contract, are going to generate a loss. That loss reduces the cash reserves of the banks on the hook for it, and some, those that cut a thin margin to maximize profits, now have to call in loans because their outstanding loans exceed what their reserves allow for, meaning they drop below 2% cash on hand of their outstanding loans. They are instantly on the verge of bankruptcy. If they fail to secure the correct ratio of reserves to loans in a hurry, a day or two, they go belly up.

That's what the Fed is for. The Fed literally prints money out of thin air. It makes emergency loans by creating money out of nowhere to lend to troubled banks, to prevent them from going bankrupt. We call it "quantitative easing", and pretend it is to stimulate the economy, but it isn't. That money doesn't go to you or me or businesses or anything else. It goes to banks about to collapse. It also buys T-Bonds to push cash into the marketplace, but that amounts to the same thing, the only difference is, buying T-Bonds puts taxpayers in the position of lender, it bails out the banks with taxpayer money rather than money just printed out of nothing, because taxpayers have to pay off those bonds at interest.

That's a long ramble that only marginally answers your question, but I made it because, as someone who understands the gears in the machine, certain things get my attention.

As a last note...everything you hear and see on TV from financial "experts", is bullshit. ALL of it. 99% of them are "finance experts"...not economists. Not the same thing at all. That's why they are always taken by surprise and blindsided by every recession that comes along. They don't actually know how the economy works, they just understand one specific gear and can tell you whether it is spinning and how fast, but not knowing the actual machine, their prognostications mean nothing.

Furthermore, 90% of economists you see on TV or media are Keynesian economists. That is the economist equivalent of socialism. They don't know anything about free markets, and their answer to everything is spend more money, government spending, and quantitative easing. That's their one trick pony. They fundamentally don't understand why the economy ebbs and flows, so much so that they chaulk it up to "animal spirits", bulls and bears...in other words, it's just inexplicable magic to them.

There are many reasons why an economy will ebb and flow, but most of it is banking. It's a banking cycle. You can't have a steady economy with a money supply that is elastic, it's impossible. You can't have a steady economy when the value of money is unstable.
 

twp

Admin, Make DuckDuckGo.com Your Search Engine.
Staff member
@Punty, RE NPR (National Public Radio), I do discount much of what they report because of their very visible liberal bias. Yes, I know my conservative bias is showing... So sue me...:D

That is not to say that everything presented by NPR is false information, but it needs careful parsing to perceive the bias and keep it in perspective. I know from conversations with educators, when I was teaching, that NPR is held in high esteem and is presented to students as 'the-way-it-is-supposed-to-be'. Subtle, and not so subtle, indoctrination.

Y'all get what I'm sayin?
 

Punty

Well-Known Member
I understand exactly what I am listening to on NPR.

Keep your friends close and your enemies closer. I make a conscious effort not to dive too deep into an echo chamber.
 

twp

Admin, Make DuckDuckGo.com Your Search Engine.
Staff member
The run on TP has hit us here in Reno. Empty shelves in the local Food Source grocery. Still plenty of paper towels on the shelves.
 

soyer38301

Active Member
Just went to the store here to bring some food stuff to the new house. Not really crowded but many empty shelves.

Only paper prods I could see were plates and napkins.

Sent from my SM-N960U using Tapatalk
 

Punty

Well-Known Member
The run on TP has hit us here in Reno. Empty shelves in the local Food Source grocery. Still plenty of paper towels on the shelves.
I strongly recommend NOT wiping your arse with paper towels. They leave micro splinters. I know, trust me.

Coffee filters work better.
 
Top