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ammo and reloading components bubble
stevecrea
Member Posts: 486 ✭✭✭
Would anyone care to comment about the ammo and reloading components bubble now in progress? Or the hoarding mania that is now ensuing?
How about the assault rifle and handgun bubble?
Or, the real estate bubble, and the oil bubble, and the internet stock bubble? How about the "Tulip Bubble", or the "South Sea Bubble", two historic bubbles that now elicit comments about how stupid people are.
Remember when oil was $147 and going to $250 or $300 within just a few years? Remember when you could not lose on real estate? Hmmmm.
How about the assault rifle and handgun bubble?
Or, the real estate bubble, and the oil bubble, and the internet stock bubble? How about the "Tulip Bubble", or the "South Sea Bubble", two historic bubbles that now elicit comments about how stupid people are.
Remember when oil was $147 and going to $250 or $300 within just a few years? Remember when you could not lose on real estate? Hmmmm.
Comments
I buy guns, real estate, ammo or steaks for the same reason- it is something I want, and can afford. If I don't want it, or can't afford it, I don't chase it.
What is going to happen in 12 months? Damifino- the crystal ball is still in the calibration shop. But, as happens in many cases, if nothing happens with the gun issue, I think there will be a LOT of used guns hittig the market in the next 12-24 months. That may be the buyer's market.
So what do YOU think is gonna happen?
Now as to the 'bubble', lead and copper prices have plummeted yet bullet and ammo prices continue to rise- all driven by demand oustripping supply. With no internals to prop up those high prices, the bubble WILL burst at some point, but I don't care to guess when.
What the lobbists on our side, namely NRA, have kept in check will most likely remain in check but the NRA can't hope to control taxation. Look at so many other countries, i.e. most of Africa and Europe where outright gun grabs couldn't be accomplished the next step was to accomplish the future sale downswing by taxation!
However, several reactions that I have:
With reference to 116br, it sounds a bit as if you like to participate in bubbles, and then, if you get stung by the bubblemania, you are prepared to say "What me, it is not my fault, everyone was doing it"! Hmmmm.
That seems a bit like the guy who paid way too much for real estate, thinking that he couldn't lose, and when he loses, blames someone else. Hmmmm.
Or, perhaps it is like the guy who smokes two packs of Winstons a day, and when he gets cancer says, "Everyone does it. How could I have known? Besides, I love to smoke! If I die, I die!"
Bubbles are bubbles. Granted, it is not evident it was a bubble until after it has burst, and then, it is evident to everyone.
Question: When copper, lead, petro, and other commodities were shooting up, the ammo and component mfrs. all pointed to that when prices shot up. Now that the commodity bubble has burst, why are prices not plummeting? Hmmmm. Price fixing? Hmmmm. That is illegal.
Many retailers are in dire financial straits. Just look around at the publicly traded companies such as Macys, Saks, JC Penney, Barnes & Noble, etc. Many of these companies are sporting stock prices down 80 to 90 percent in the last three years.
The sporting goods retailers are no different, but many of them are not publicly traded. Bank lines of credit are being reduced or not renewed at all. Vendor financing is being constrained. In this environment, it is only normal for a retailer (I could name several here locally) to reduce the amount of goods for sale on the shelves, because he has to, not because he wants to. Ammo, powder, bullets, primers, and other goods are very pricey goods, and if the vendor is tough on requiring the retailer to pay its bills, the retailer may be forced to buy less and reduce its inventories. Further, if the retailer is asked "Why do not you have more IMR 4350 on the shelf?", he is not likely to respond to you, "Because we are behind on our bill to DuPont, we cannot get any more shipments in until we get more current on what we owe them." Rather, he is more likely to say "Obama is going to impose a heavy tax on ammo and components, and everyone is hoarding all of it when we get a shipment in."
Instead we have a lot of American shooters (and there are more of them today than ever before) storing up ammo.
Its not JUST that there could be an ammo tax under Obama (though that is absolutely a contributing factor) but also that under times of massive economic stress, people go into a survivalist mentality, hence the need for ammo.
The reason prices are high is absolutely simple: Supplies are limited and demand is sky-high.
Therefore even though commodities prices have FINALLY started to drop a bit, ammo prices haven't caught up, because demand is escalating.
Whether or prices will EVER drop depends on a whole host of things, including the strength of the dollar, inflation, commodity and transportation costs, and of course the likelihood of restrictive ammo taxes, etc.
If you look at the cost of ammo in dollar-adjusted terms, ammo today is actually NOT much more expensive than 30 years ago. . .in fact much of it is actually CHEAPER, especially .22LR ammo. Its just that the unprecedently CHEAP ammo costs of ten years ago have effectively come to an end. (Nobody was talking about a "glut" when 7.62x39 ammo was available at ten cents a round less than ten years ago).
As to hoarding, that's clearly a real phenomenon, but whether or not its a "mania" (ie irrational) remains to be seen.
*IF* the Obama administration passes an ammo tax, then anyone NOT hoarding will be kicking themselves, and the hoarders will be heroes, not manics! [;)]
The way I look at this, there is little downside to accumulating ammo, so long as you could use it and have the funds and space for it. Properly kept ammo is good for decades, and the chance of it going DOWN in value over any arbitrary future 3-5 year period is pretty low.
To me, the value of my house is not as an investment, but a place to keep the snow off me. Value of a gun is not how much it may appreciate, but is it something I can enjoy at the range. When Winchester made announcement about closing the New Haven plant, and everybody was suddenly buying Winchesters at prices that jumped $100 overnight, I was buying Brownings (and Mossbergs)
I guess my point is that in any of the bubbles, there will be some folks that will get caught when it pops. Usually those chasing the bubble the longest. I try not to do that.
Good topic tho-
I could not agree with you more. The value of a house, a gun, or ammo, or components, is in using them.
I do not know, and no one else knows, how this will turn out. However, to me, the present mania and bubbling has many characteristics of a true bubble.
Question: Perhaps the gun hoarders may wish to consider the impact on their "investment" if Congress somehow passes a significant tax on the seller of an AR, or handgun. What would be the impact if someone could sell their AR, or AK47, or Glock, but that he would be required to pay a $2500 tax on such sale? Or, if the owner of an AR or AK47 or handgun were required to pay an annual tax of $250 for each? How would that impact the market?
In short, many people apparently feel that their mania is rational, rather than irrational. Only time will tell.
The future we face is very uncertain, in many ways. This includes especially First, Second, and Fourth Amendment rights which are all under seige. The United States which emerges from the next 4 (or 8, perish the thought) years will probably bear little resemblance to the United States we all knew. We will see a lot of change, but it won't be the kind of change I can believe in.
Many factors are driving the scarcity and price increases in ammo and components, which have been elaborated on already in previous posts. Whether real or contrived, or who is to blame for this, is largely irrelevant to you and I on a personal level. I guess it all depends on how you view the risk factor. If you can convince yourself that nothing will change under the new regime, then be content and do nothing. But most of us can see how the winds are changing, and that it is better to err on the side of caution than to be caught with our pants down like I did when the Clintonista gang took over.