gold & silver sold outBy Bill Holter:

With factories cranking out guns and ammo at 110% of capacity, how could a shortage currently exist?

Now, think about the Gold and Silver mining industry.  Peak production took place over 10 years ago.  What do you think will happen when investors, big BIG investors not just in the U.S. but ALL over the world vote with their trillion Dollar wallets?  Do you really believe that you’ll have any chance at all to purchase Silver or Gold? 

No, you won’t which is why you need to be pre-positioned because what “was” available yesterday will go into hiding over night.  This is not even a bold prediction anymore.   This is exactly what will happen and again illustrate the simple concept of supply and demand!

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Shortages, we Americans don’t really know what these are with the exception of the OPEC (maybe) induced gas shortages back in 1973 and again in ’79.  I said “maybe” because I had a client who at the time owned a dozen supertankers, several were filled with oil sitting in the harbor and weren’t allowed to off load.  Truly we don’t know what it is to “want” and have never experienced “empty shelves” with the exception of the occasional hurricane or other natural event.  Even so, goods started to reappear within a week or so and the “shortage” would go away nearly as fast as it came.

This past weekend I decided to go out and target practice with my family.  I stopped at Walmart on the way because we were low on “practice shot” and didn’t want to waste the more expensive hollow point ammo.  Lo and behold, in the locked case where normally sits 1,000 or more boxes of ammo…there was NONE!  Well almost none, I counted 7 boxes of odd caliber ammo that had not been hoarded.  I knew that the local gun dealer was regularly selling out but I never dreamed that even Walmart would be empty.  I figured that with their buying power they would still have stock left…I was wrong!  The woman behind the counter told me that they get shipments each and every night but normally by 8:00 each morning everything is gone.
So why is this happening?  Well, a couple of reasons.  First because people are scared.  Scared that an out of control government will ban guns and ammo in direct conflict with this nation’s Constitution.  The political and media rhetoric after the Newtown Ct. shooting was turned up full volume.  I won’t get into it here, but do yourself a favor and spend an hour or so researching what happened, what “really” happened.  There are many contradictions and quite a few things don’t add up just as they haven’t for other “events” in the past.  In any case, the population has voted.  I don’t mean “voted” as in where Diebold counts the votes, no, they voted with their wallets and decided to spend their money on ammunition and arms.  As a side note, the local dealer here has not even seen a new in the box AR in over 2 months.  What was retailing for about $800 3 months ago is now $1,800 for a used one.  Ah, supply and demand!
But I said that there were 2 reasons for the ammo shortage…there are.  The Dept. of Homeland Security has ordered another 21 million rounds bringing  the total purchase to 1.6 BILLION rounds…this is enough to kill every living American 5 times over and then some!  And this doesn’t even account for those carrying the guns and doing the shooting!  Now, if you will take your “adult” thinking cap off and put on the one from “3rd grade”, please ask yourself “WHY?”
Why would it be necessary for Homeland Security to have this many rounds of ammunition?  Do they fear a mass mob crashing the Mexican or Canadian borders?  OR…are they stocking up for something else?  “Something else” that we don’t know about?  Well, seriously, we “know about it” but we just don’t know what “it” will exactly look like or when it will start.  This is not humorous stuff at all, people are merely acting in their own self preservation modes and doing what they feel necessary to protect themselves.  It never matters “why” supply or demand increase or decrease, price and availablity are always affected one way or the other.
My wife read the above and asked me “what does this have to do with investments”?  First of all, your investments won’t mean a single thing if you cannot protect yourselves.  Secondly, it has to do with “supply and demand”.  With factories cranking out guns and ammo at 110% of capacity, how could a shortage exist? 
Now, think about the Gold and Silver mining industry.  Peak production took place over 10 years ago.  What do you think will happen when investors, big BIG investors not just in the U.S. but ALL over the world vote with their trillion Dollar wallets?  Do you really believe that you’ll have any chance at all to purchase Silver or Gold?  No, you won’t which is why you need to be pre positioned because what “was” available yesterday will go into hiding over night.  This is not even a bold prediction anymore.  This is exactly what will happen and again illustrate the simple concept of supply and demand!  Regards,  Bill H.
  1. I went to my guy at the local coin shop this morning to get some more ASEs and he had NONE.  Last week he had about 100 tubes, and now he has NONE.  He used to have a large supply of pretty much everything under the sun, but now he only has a bunch of 90%, so I bought $120 face of halves and went on my way.  He was telling me that it is getting harder by the day to get supply and when he does get it ordered it can take 6 weeks to get it.  He told me that more and more people are coming in his shop everyday for the first time wanting to learn about silver and buy some.  He said that the demand is WAY higher than the supply, which I think by now we all know that, but he just reaffirms it.  The moral of the story is that this thing is coming to a head, so hold on tight and stand your ground… DON’T give up your position!!

    • Good story.  It is important to remember that the process of selling paper Gold and paper Silver while at the same time buying physical Gold and physical Silver will actually result in lower prices for Gold and Silver at that instant.  Why?  Because the spot prices of Gold and Silver are set by the paper market at any specific moment.  Only later do prices react to the actual supply and demand fundamentals of the physical market.  But this explains precisely why there is currently great demand for physical Silver and Gold, while at the same time the prices of Silver and Gold are dropping in the short term.

  2. The guns and ammo companies are cashing in on your fear. Maybe you should ask yourself if your behavior is rational. The gun and ammo markets are not anything like the gold and silver markets. They are true supply and demand markets, whereas the precious metal markets are controlled by paper derivatives and futures, not true supply and demand.

    The government is not going to take your guns. Don’t let paranoia control your life.

    • @MrBoompi
      Just use logic, critical thinking and common sense, all of which tell me that they are indeed making a sufficient size run at the 2nd amendment. No, Confiscation is not around the corner, but they are definitely trying to take some of the bite out of our right to bear arms. They are attacking the constitution across the board but fear is driving our reactions? I think the action is driving the reaction here. Besides with inflation, and the Fed, any bullets or guns purchased today will be with a higher purchasing power than tomorrow. Stock up any hard assets.
      There is definitely a difference between paranoia and prudence.

    • I agree, Orion.  This is not a real ammo shortage.  It is contrived by those who now realize that they cannot just delete the 2nd Amendment from the US Constitution and that their attempt to do so will result in a knock-down drag-out fight that they WILL lose.  Instead, they now seem intent on putting a squeeze on the ammo we need to make our guns effective.  This seems obvious from the fact that both .22 LR and 7.62 x 39 is back ordered or out of stock at virtually every single on-line ammo vendor.  Both of these rounds are manufactured in HUGE quantities… many billions of rounds per year, many of them off-shore in factories that turn it out by the rail car load on a daily basis.  Neither of these rounds is used by the US Gov, so their buying of ammo is not delaying the shipments of ammo of this kind.  Other manufacturing equipment is not being shunted to other caliber production either, since the equipment used to make both of these rounds is specific to them and closely related calibers that the US Gov does not use.
      Four months ago, I attended a gun show with my son.  As we walked the aisles and looked at all of the ammo and ammo components for sale, it was like there was an ocean of this stuff available at cheap prices.  I bought 1000 rounds of the Tula brand ammo for my Saiga AK rifle for $215.  They even threw in a 30-cal. ammo box for me to haul it home in.  It all fit except 1 20-round box.  My son bought 500 rounds of ammo for his AR-15 rifle as well and he got a good price too.  
      The situation today is radically different from what it was 4 months ago.  I did an on-line search for ammo yesterday and found dozens of sites that normally sell ammo in bulk and virtually all of their military calibers were “sold out” or “back ordered”.  The one place that I found AK ammo had it for $459 per 1,000 round case.  That is more than double the price of 4 months ago, IF you can even get any.  I find it VERY odd that ammo that is manufactured in HUGE quantity outside the US and that routinely comes here by the shipload has suddenly disappeared.  This entire affair smells like last month’s fish and routine market forces do NOT explain it, IMO.

    • @ED_B
      DHS buying 2 billion plus bullets doesn’t help though I am sure. They said by comparing the average number of bullets used a year in Iraq that these purchases would be enough ammo for a war lasting 30 years. Not sure if I have seen a source for these numbers, but if true that is scary to think about.

    • No, that probably did not help anyone wanting the same kinds of rounds that the Gov is buying.  To me, that means the usual .40-cal and .223 cal ammo.  The Gov also uses other ammo types but in much smaller quantities than these two primary rounds.  I would expect their buying to cause considerable shortage of both of these rounds.  What I do not expect is for their buying of these specific calibers to drastically affect the production and distribution of completely unrelated types of ammo made by other manufactures than they typically contract to for ammo supplies.
      Ammo product lines run at high speeds and are only taken down for routine maintenance, equipment breakage, and slack demand.  Otherwise, they run at full speed, cranking out hundreds of thousands and even millions of rounds per day.  There is more than sufficient production at the Russian, Bulgarian, and Yugoslavian arms and ammo makers to completely supply virtually any level of demand for such ammo here in the US.  There is also at least one Chinese ammo maker that exports to the US.  Since US dollars are still in demand in these countries, one would think that these manufacturers would be very interested in keeping the ammo flowing out and the dollars flowing in.
      Additionally, we also see a considerable shortage of AK-47 and AK-74 type rifles.  I have been in large gun stores as recently as 6 months ago when they had over 100 of these rifles on display plus more in stock in their storage rooms.  Go to any of these stores today and you will likely see less than 5 such rifles, some of which are for display only and not for sale.  30-round magazines are another commodity that has dried up.  4-5 months ago, it was possible to buy these in a 10-pack for $80… or $8 each.  Today, they are difficult to find and when you do they cost $30-35 each.  
      It is just difficult to believe that there is not something underhanded going on.   Yes, I do know about supply and demand plus other market forces.  The US Gov is getting into the habit of distorting various markets via their policies, however, and this seems like yet another example of that.
      Tomorrow, my son and I will go on a scouting mission to a local gun show.  This is not a big show so we are not expecting to see a large amount of either guns or ammo for sale but it will be interesting to see just what is available locally.  There will be a big show in mid-March, so maybe that will be more definitive.  In either case, it will be some good Dad-Son quality time.  🙂

  3. My LCS stated the same, that many new people are showing up, but more of those people have been selling.  I guess the weak hands and people hurting for cash are swapping for fiat but the few buyer are buying more and more.  He normally has a couple hundred ounces but today he said they raised premiums to $3 per ounce.  I wanted to thank the guy here that recommended refiners as I have been getting orders at spot for years but am working on a group buy with a new refiner to place a large order at 5% under spot!

  4. The weapons and ammo business operates on a more true supply and demand basis than our manipulated metals market does.  There is no such thing as a paper rifle.  Its all phyzz baby.  Once the price of metals catches up with the demand there will be plenty of supply in my opinion.  Who wants to sell silver at these prices?  Not this amateur.  

  5. Since Bill’s  post is up I’ll provide some comments that are less than 48 hours old, connect a few dots, dispel some concerns and then reflect on why and how silver will go off the charts.
    1.  I went to 4 stores today.  Walmart, 2 local guns stores and Big 5.  WMT and B 5 had some 12 gauge and a good bit of 20 gauge bird shot, 3 box max.  Prices at B 5 were 50% higher than WMT.  WMT 20 Ga was $25 for 100 rounds. They had a very good price on a Mossberg 20 ga. I almost bit.  B 5’s 20 GA was a slightly higher quality but costly at $400. WMT was $260
    2.  Local gun stores had handguns; pricey but affordable.  Long guns were costly and in low supply.  Ammo was very limited.  22 cal 40 gr was $30 for 325 round box, 1 box max.  Lead bullets are a no sale with me. Both the gun stores had no customers when I came in.

    3.  The ammo shortage is a classic connect-the-dots.  Mid 2012 the Fed agencies started buying a billion plus rounds.  This DID NOT create a shortage situation.  With the Aurora, Gifford and Newtown false flags, this created a perfect storm for the administration to start its gun and ammo threats, bans and Executive Orders. Never waste a good crisis, they said. The present administration’s presidential win was a foregone conclusion, preordained,  judging from the voting records of key precincts so the 2012  shooting events and  related problems were seamlessly transfered after the election.  Playing on the fears of many people and the hype over false flag gun violence, Obama, Feinstein and Boxer, Shumer and Cuomo administered the coup de grace against guns and ammo. What we have seen is a non stop 2 month hegira against guns.
    What was a non-shortage situation in September and November became a total shortage and ammo blackout in December. I was buying in each of these 3 months and in high quantity.  That’s thousands of rounds of each caliber for myself and my BOB.  I had cash and contacts to manage those types of purchases. That’s the place I have in my BOB so we took advantage of the lull in prices in 2012.   Then Prices doubled and tripled where desireable ammo was available.  Popular gun styles such as the AR 15, M4 and AK-47 went up by 200-300% overnight. 
    These shortages were  manufactured through a fear factor, a false theme  that was played by the administration and press to get people to strip the shelves and create a real shortage. This shortage was created in less than 2 weeks.
    The three letter Federal agencies may be buying a billion rounds. That is peanuts compared to the American people.  The reason it’s a miniscule amount is that the American people own about 300,000,000 fire arms.  Imagine if each gun had 500 rounds.  We’re not talking about 2 billion rounds of pistol ammo in the hands of the DHS et al.  We are talking about 150,000,000,000 rounds, or more, in the hands of the gun owners of America. Maybe some people own a box or two of 38 or 9mm but most people own heavy amounts of ammo. 
    My firearms trainer has an excellent ear to hear people’s fears. He trains the professionals and amateurs alike and to the last man and women, they are all concerned; they all want training for all their guns, all their guns including pistols, rifles and shotguns. And they want ammo.
    Not just 50-100 rounds. 
    They want boxes and pallets of ammo; thousands of rounds per gun.  That is a fact. That’s fear about the future reflected in the minds of these folks. I have gotten to know some, trained with them and share some of their concerns.
    I don’t worry about the FEMA Brown Shirt wannabes and the dickless wonders from the the DHS, TSA, NOAA and Social Security administration with their 40 cal pistols. To fight a real fight you need substantial battle rifles.  Ask the 1,500,000 hunters in  three northern states what it means to have hunting and killing skills.
     The effort to wash Nazi cowards down the sewer would take a laughably small amount of work on the part of real gun fighters and professionals.  Former military, police and well trained firearms owners would deal with them.  They are  bully boy corps of amateurs with no spine or guts. We outgun them 1,000 to 1. The odds weigh badly against these Gestapo bastards.  If these goons make the mistake to try to take down an inner city they’ll find the bangers, homies and locals will remove the threat quite quickly.

    Now let’s rotate to precious metals. Staying with the theme of shortages, real or perceived, for those of us old enough to remember the Johnny Carson joke about 1974, during an era of inflation and shortages at the gas line, Carson made a quip in his monoloque that toilet paper was in very short supply.  Within 24 hours the store shelves were stripped bare.  It was a joke. There was no shortages.  But rumor and the fear factor sent people flying to the stores because no one wants to use the Sears Catalogue for their business.
    Look how easy it was for Americans to strip the shelves of every category of ammunition known to mankind. Look what it took to start the rush.  It started with a whisper that ammo shortages would hit and before you could get to the store, the crowds were 10 deep buying anything and at pretty much any price. The later actions of Executive Orders were just frosting on the cake.

    Imagine then what sort of rumor or statement from some pundit would create that stampede to the silver stores?  Who’s voice would have sufficient credibility to start this rush. Obama saying that precious metals would be outlawed, unavailable by X date or taxed, registered or even potentially confiscated to handle or manage a national crisis?
    That voice? 
    This is the president who signed the NDAA in the wee hours of the night and then signed the NDRP just a few months later. Both these Executive Orders supposedly have teeth and both make clear that the government can take any asset you own.
    Maybe Jay Leno will start the stampede with a joke or two. But once that flood starts, then you’ll see price increases and shortages that are nothing less than epic. Rumors, fear and the madness of the crowd will have a major effect in the price of precious metals.

    I leave nothing past the present administration to promote one form of fear factor or another. They use this method to herd the sheep.  Right now there’s  a story of Obama walking back his fear mongering BS about the sequester.  You would have thought that this was an Extinction Level Event by  the way the pundits, elites and the president screeched about its hideous effects.
      Rest assured, there are many more terrible events that could occur besides  the meager loss of 2% of government expenditures, a non-event of monumental unimportance.
    There are plenty of things that go bump in the night but those that flow from the White House are the least of my concerns.  The Keystone Cops, Laurel and Hardy and the  Marx Brothers are in charge. Pay them no mind.  We can handle pretty much whatever might come our way.

    • “Rest assured, there are many more terrible events that could occur besides  the meager loss of 2% of government expenditures, a non-event of monumental unimportance.”
      It’s not even that, AG.  It is a 2% reduction in the amount of INCREASE they already have figured in.  They will, in fact, spend more money next year than they did last year.  Yes, they wildly over-played a lousy hand and are now on record as having done so.  Next, they will be telling us that it is the sequester’s fault each and every time they screw something else up.  Nothing like having a convenient one-size-fits-all excuse for their incompetence.  These people are really good at running for office and BSing or bribing their idiot voters but not worth a s**t at actually DOING the work that holding an office legitimately requires.

  6. I could have bought white box Winchester 9mm today for $15 a box, my gun guy had a dozen boxes on the shelf. He is out of some thing, no small pistol primers and I need 3,000 for my reloading stash. Picked up 8 pounds of Red Dot powder so set on that for quite awhile.

      “Picked up 8 pounds of Red Dot powder so set on that for quite awhile.”
      I like the dot powders a lot.  Many shotgun reloaders use them with good results.  I LOVE blue dot in my magnum hand gun loads.  My very favorite .357 load for my S&W Mdl 19 is 13.4 grains of blue dot under a 140 grain FMJ truncated cone bullet with a magnum pistol primer to touch it off.  This is a hot load, at least 1450 fps, so anyone trying this needs to back off the powder charge by about 2 grains and then work up to it in your gun.

  7. Suppliers probably cannot keep up with the demand from the DHS, the DHS need to be able to shoot every ‘unpatriotic’ American Citizen at least 1000 times to make sure they are dead.
    Hey Comex, here’s an idea, why don’t you control the guns and ammo by issuing ETF’s for paper guns and paper bullets, that would stop the shortage right?

  8. That’s an interesting point Ed. With all the shooting wars going on, I have not heard of any wars being called off due to an ammo shortage. Hmmm. That makes me wonder if wars will ever end due to a lack of bullets. Not likely.

  9. There are no ammo shortages in Canada!
    After spending an hour or so one line, cruizing through a dozen or more ammo web site, I came on one that has plenty of ammunition.  And at great prices. There’s one problem.  They only ship to Canadian addresses.  Export regulations prohibit shipments to the US.  I tried with no success.  This tells me that the ammo shortages and high prices in the US are a self inflicted wound. If the prices in the US were reflected in Canada, the Canuck prices would be 3-4 times as much.
    The site address SFRC-the ammo source  (South Frontenac Rental)  

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