When will the hyper gun demand bubble burst?
- Thread starter Kynoch
- Start date
- Status
Kynoch
member
History suggests otherwise...
Kynoch
member
If MR was elected and came out strong against gun control AND the economy improved greatly, I think gun demand/prices would drop fairly dramatically. Some more than others.
A Ruger Single-10 might not drop much. A Saiga rifle could drop by well more than 50%
DefiantDad
Member
- Joined
- Jun 1, 2012
- Messages
- 499
Honestly I don't see that happening. I don't see guns the same way as other "investments" such as, say, gold coins. We are talking about tangible investments of course, not paper assets such as stocks. People are realizing that it's better to invest in hard goods, tangible assets, before the real bubble bursts (and that bubble is printed fiat money). This is not a discussion specifically on financial aspects or money supply, but since it *is* about the financial state of firearms prices, it has to be looked at not in a vacuum, but against the backdrop of what is going on around us.
Firearms, in addition to being a "store of value" (i.e., something that holds a quantity of value, and is attractive enough to someone else that they are willing to trade you for it) represent a sense of *physical* security that goes beyond what a one ounce gold coin can do (as an example). And security (or rather, insecurity) is very much top of mind, when a person perceives a lot of unknown and ambiguity all around (not to mention outright unrest or disaster).
Again, not to lead into a tangent, but just one little data point to show what is going on (in addition to everything else) is our national debt. Look at what is our national debt (15 trillion last I looked), look at how much just the interest is every day toward that debt (6 billion), then calculate how many seconds are in a year. Also calculate how many HOURS it has been since the estimated age of the universe. And compare these numbers. I guarantee you will fall off your chair and start to think about the ramifications.
Firearms, in addition to being a "store of value" (i.e., something that holds a quantity of value, and is attractive enough to someone else that they are willing to trade you for it) represent a sense of *physical* security that goes beyond what a one ounce gold coin can do (as an example). And security (or rather, insecurity) is very much top of mind, when a person perceives a lot of unknown and ambiguity all around (not to mention outright unrest or disaster).
Again, not to lead into a tangent, but just one little data point to show what is going on (in addition to everything else) is our national debt. Look at what is our national debt (15 trillion last I looked), look at how much just the interest is every day toward that debt (6 billion), then calculate how many seconds are in a year. Also calculate how many HOURS it has been since the estimated age of the universe. And compare these numbers. I guarantee you will fall off your chair and start to think about the ramifications.
Ignition Override
Member
DefiantDad:
You mentioned that nervous Euro citizens would like to buy some guns.
When riots broke out in several English cities last summer (or whenever) recently, did many of the people living in those urban centers question the inability to own a handgun, or semi-auto rifle in the UK or Ireland?
Maybe a UK citizen will see this.
You mentioned that nervous Euro citizens would like to buy some guns.
When riots broke out in several English cities last summer (or whenever) recently, did many of the people living in those urban centers question the inability to own a handgun, or semi-auto rifle in the UK or Ireland?
Maybe a UK citizen will see this.
GhostlyKarliion
Member
- Joined
- Dec 5, 2006
- Messages
- 426
I'm not sure they will. I think the current cost of *some* firearms is being influenced by regulation and taxes, others have barely been affected.
In 1985 you could buy a Glock 17 for $465.
Today you can buy one for a whopping $34 more.
The way I understand it the same can be said for the Beretta 92 pistol and Mossberg 500's (don't quote me on those, they are hearsay)
The only things that I can find that are 'overpriced' are the Sport Utility Rifles and certain imports. I know a lot of work goes into some of the AR's, and a lot of unnecessary work goes into AK's because of compliance with gov't laws.
Also I suspect that the warehouses which once housed racks of guns overseas are now mostly gone and so we are feeling the effects of foreign materials and labor costs going up, you can't force little johnny to build AK's all day for a nickel and a piece of bread anymore.
I think the current prices are here to stay.
IMHO
In 1985 you could buy a Glock 17 for $465.
Today you can buy one for a whopping $34 more.
The way I understand it the same can be said for the Beretta 92 pistol and Mossberg 500's (don't quote me on those, they are hearsay)
The only things that I can find that are 'overpriced' are the Sport Utility Rifles and certain imports. I know a lot of work goes into some of the AR's, and a lot of unnecessary work goes into AK's because of compliance with gov't laws.
Also I suspect that the warehouses which once housed racks of guns overseas are now mostly gone and so we are feeling the effects of foreign materials and labor costs going up, you can't force little johnny to build AK's all day for a nickel and a piece of bread anymore.
I think the current prices are here to stay.
IMHO
DefiantDad
Member
- Joined
- Jun 1, 2012
- Messages
- 499
It would be hard to poll the people who did think that. But if we were in their shoes, what would we think?
Kynoch
member
Glock is very much an exception. Most (steel) guns have doubled in price with the exception of the Beretta 92 which has dropped a great deal due to demand and probably some degree to amortization of the process used to make them.
I think the current prices are going to drop, big time -- at least on some guns. However on something like Glocks and their direct competitors, I think price will stay fairly static. You can bet however that they would be higher right now if Glock didn't exist.
Those overseas warehouses aren't exactly empty (just ask the Philippians) but the ability to import/re-import is not always given these days.
Last edited:
Radagast
Member
I'm an Aussie, so this is a bit of an outsiders view of the US market.
On the price of firearms coming down? I can't see it happening for a number of reasons.
1)
Firearms have effectively become commodities over the last 20 years. Those manufacturers that could not adapt simple went out of business, those that could adopted what worked.
Colt was hand fitted, high labor cost. Colt is effectively dead. In its place are a number of 1911 manufacturers producing variants based on CNC machining, with the cheaper guns using castings.
Look at the identi-kit polymer autos. Glock, M&P, XD, SR9, etc. Striker fired, rust resistant, simple manual of arms, simple engineering, low manufacturing costs. Basically they all function in the same manner and will all do the job.
Ditto with AR15s, bolt action rifles, semi auto and pump shotguns, etc.
There is already a lot of competition, so prices are already at a price point where they will sell and make money. I doubt there is enough margin for long term price cuts though. Short term to get in cash flow? Sure. Car companies do that too. When they do it long enough they become Government Motors. Gun companies will not have that luxury, as Government Arms will not be allowed to sell to the public.
2)
Unmet, yet to be unlocked demand is there. The major metropolis' of the NE & west coasts the 'blue states' are about to have their artificially closed markets busted open by the courts. NYC alone will probably by good for several million firearms over the next 10 years after it is forced to go shall issue and to repeal its assault weapons ban. Ditto, MA, NJ, Chi-town, etc.
3)
The US dollar will continue to devalue over time unless congress reins in its deficit spending. I don't see that happening. This will make imports, including cheap Russian & Serbian sourced ammo more expensive. Domestic producers use materials that are priced internationally (lead, copper, tin, steel, aluminum). The basic inputs will go up in price for domestic manufacturers too.
I'm not going to go into worries about economic collapse or withdrawal of govt police protection, although there are indications of this in the municipal bankruptcies that are now starting. The first three points are reason enough for the price of guns to remain where they are, or go higher.
On the price of firearms coming down? I can't see it happening for a number of reasons.
1)
Firearms have effectively become commodities over the last 20 years. Those manufacturers that could not adapt simple went out of business, those that could adopted what worked.
Colt was hand fitted, high labor cost. Colt is effectively dead. In its place are a number of 1911 manufacturers producing variants based on CNC machining, with the cheaper guns using castings.
Look at the identi-kit polymer autos. Glock, M&P, XD, SR9, etc. Striker fired, rust resistant, simple manual of arms, simple engineering, low manufacturing costs. Basically they all function in the same manner and will all do the job.
Ditto with AR15s, bolt action rifles, semi auto and pump shotguns, etc.
There is already a lot of competition, so prices are already at a price point where they will sell and make money. I doubt there is enough margin for long term price cuts though. Short term to get in cash flow? Sure. Car companies do that too. When they do it long enough they become Government Motors. Gun companies will not have that luxury, as Government Arms will not be allowed to sell to the public.
2)
Unmet, yet to be unlocked demand is there. The major metropolis' of the NE & west coasts the 'blue states' are about to have their artificially closed markets busted open by the courts. NYC alone will probably by good for several million firearms over the next 10 years after it is forced to go shall issue and to repeal its assault weapons ban. Ditto, MA, NJ, Chi-town, etc.
3)
The US dollar will continue to devalue over time unless congress reins in its deficit spending. I don't see that happening. This will make imports, including cheap Russian & Serbian sourced ammo more expensive. Domestic producers use materials that are priced internationally (lead, copper, tin, steel, aluminum). The basic inputs will go up in price for domestic manufacturers too.
I'm not going to go into worries about economic collapse or withdrawal of govt police protection, although there are indications of this in the municipal bankruptcies that are now starting. The first three points are reason enough for the price of guns to remain where they are, or go higher.
Regarding my comment that SKS cost $99 ten years ago, I just checked gun broker and see they are now selling over $200 mostly around $275 with some going for $400. Nice investment, buy something... let it sit for 10 years and at least doubles in value.
Centurian22
Member
Hopefully the demand never decreases as we have a long way to go before "enough" (read as most of the law abiding population) citizens are properly armed. But hopefully the supply picks up to meet the demand and competitive production of lower cost but still good quality products (like the Savage Axis for one example) will drive companies to offer reasonable prices on some of their products.
JHenry
Member
the glock's price is probably due to the marketing strategy. Im no expert in either buisness nor glocks, but glocks probably had an extensive amount of RnD put into them, and since they were essentially the only polymer pistol on the block at that time(i think the usp was around as well but dont quote me on it). So to cover the costs that had sunk into RnD they initially introduced the pistol at a much higher cost than it actually cost with the intention to gradually sell more at lower costs(it maximizes the profits). The reason they are still the same price is most likely inflation.
as far as the "bursting bubble" goes, firearms do not follow the patterns of other goods. At the end of the day there will never be a sudden drop in price across the board, why? In these theories your assuming that the market will be saturated because the new and used markets will eventually overflow the demand. however I believe that if prices dropped people would simply buy them recognizing that the prices will simply go up again. For instance, how many people do you know who own multiple guns to fill the same purpose or even the same model? As long as inflation goes up and citizens have the right to own guns, prices will continue to rise
as far as the "bursting bubble" goes, firearms do not follow the patterns of other goods. At the end of the day there will never be a sudden drop in price across the board, why? In these theories your assuming that the market will be saturated because the new and used markets will eventually overflow the demand. however I believe that if prices dropped people would simply buy them recognizing that the prices will simply go up again. For instance, how many people do you know who own multiple guns to fill the same purpose or even the same model? As long as inflation goes up and citizens have the right to own guns, prices will continue to rise
Prices are set by us, the consumer. As long as we keep buying at current prices, prices will keep going up. Once we stop buying, prices will go down.We have debated this subject for years on THR but ,in the end, the law of supply and demand did,does, and always will apply.
Kynoch
member
Colt just got a contract to supply $20,000,000 worth of 1911's to the USMC. Hardly "dead." Colt didn't suffer because of hand-fitting (Les Bear Custom is going crazy with orders) nor high labor costs (the UAW was on strike for years.) What hurt Colt was continued horrid management.
The competition is less than you think. Otherwise guns wouldn't be as expensive as they are. In all sincerity compare a Glock to a $200.00 heavy-duty drill motor. Just look at the difference in the number of parts and the cost of material. Look at the difference in assembly time of both products. When it comes to margin I'm sure companies like Glock have a great deal. Just look at how cheaply they sell to law enforcement.
Don't hold your breath.
Other country's money is devaluing right along with the $.
Hmmm...[/QUOTE]
Last edited:
Kynoch
member
Why don't you buy a bunch more and see how they do in the next 10 years.
Kynoch
member
The law of supply and demand...
There are two sides to that equation. Supply AND demand. Both buyers and sellers (the "market") set the price. In the case of guns there are outside forces as well like the gov't.
Kynoch
member
How do you know? That's pure hyperbole.
R.W.Dale
Member
A MINIMUM of eight with Romney with a possibility of SIXTEEN
In the event of a Romney win his Democratic rival WILL be anti. We would not have an oppurtunity at a pro gun candidate should Romney win till he either term limits out or whoever he loses to in four gets defeated. That's eight years of anti to contend with minimum.
And I'm going to wager Romneys running mate isn't going to have clean pro2a credentials
Canfield
Member
If we knew there was a bubble and when it would end, there wouldn't be a bubble.
Kynoch
member
It's most certainly due to a marketing strategy. Glock was (and possibly is) able to build quality handguns a lot cheaper than most anyone else even when folding in the amortized R&D/tooling expenses. When Glock came on the scene one of the things being chased by government were the el cheapo, die cast, ring-of-fire, junk guns. While Glock might have been able to price their guns much lower (as they do for law enforcement) and still maintain suitable margins they didn't want to be labeled as a junk gun manufacturer so they priced their guns near the market resulting in great margins. As the market headed north, they pretty much held their pricing static.
The prices for most goods don't typically drop in a sudden manner. They erode through competition -- which is also true for guns except that the gun market is not truly 100% an open market so it slows things down.
Markets become saturated for durable goods like guns. They aren't like most other durable goods like vehicles or tools. Most guns don't wear out. They are retained, sold or given away. In time the market will be saturated driving prices lower. In the mean time it will be fascinating to watch what the gunmakers do to keep prices as high as possible. Limit production. Take certain models out of production altogether for the foreseeable future, etc. etc.
Unless capacity further shrinks, the markets will become better satiated not only through sales but an eventual shift in consumer attitudes.
Last edited:
Kynoch
member
Hmmm
Kynoch
member
Not true. The quantity purchased (and/or quantity produced) has to change. If people actually stopped buying in the hopes of driving prices down it would be effective only until they resumed buying.
The only way the bubble will burst is by satisfying the demand -- through the passage of time at current production rates or by raising production.
That's not entirely true, you could get someone like John Tester or like him for the Dem nom.
- Status
Similar threads
- Locked
- Locked
