Ammunition Bubble timeline and prediction. (Specifically .22lr)

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cpy911:

In July '09, did some of you folks check Russian 7.62x39 on Gunbroker?
A single seller in Keene NH had over 45,000 rds. offered, all at the same time.

Once this bubble starts to leak and shrink, we know who will Then be quite anxious.
It will be a race downhill.
 
cpy911:

In July '09, did some of you folks check Russian 7.62x39 on Gunbroker?
A single seller in Keene NH had over 45,000 rds. offered, all at the same time.

Once this bubble starts to leak and shrink, we know who will Then be quite anxious.
It will be a race downhill.
Agreed, the flippers will be trying to get back what they have into their stash and then they will have to discount a little to break even or take a small loss. If they are burning their new found wealth now, it will make paying the bills really tough.

Hmm, reminds me of the 2008-9 housing bubble.
 
I disagree that its a bubble. Bubbles are nothing more than price increases on a product thats not experiencing a shortage. What we have is an extraordinary situation where the normal supply/demand process cannot reach equilibrium due to external forces. I'm witnessing changing behaviors in those standing in line just to get their 1 box of ammo per caliber, a max of 3 calibers per perspn per day.
What had started as a couple of people showing up 5-10 minutes before the local Academy opens to people showing up 2hours and 15 minutes prior to opening. Today several people brought family members with them in an effort to acquire more ammo.

Its very possible we have reached a point where we cannot recover to post crises levels in regards to ammo. The entire supply chain is empty. The end user not withstanding the new shooters who continue to enter on the demand side are short and need restocking too. Its been 3 months and any ammo delivery is quickly bought up and as a result the ability to build up stock is impossible.
+100

I guess some find comfort in the past and the hope that we'll return to it but the truth is this country has eclipsed so many fiscal tipping points we don't know what normal will be.

The ammo crisis as painful as it is really isn't broad reaching (in it's affect to the population) with multiple influences affecting the markets trying to predict and end seems futile at best.
 
I see some of the "flippers" getting frustrated,
On my local area's "Armslist" there has been a guy buying ammo from the local Fleet Farm, then trying to add 15-20% and sell it online,
The last ad he posted was,for sale/trade for 22LR ammo for the same 9MM CCI ammo he has been trying to sell for the last 2-weeks, Then the end of the ad is filled with a bunch of jibberish about "dont try and lowball me either,cause if you say your 22LR ammo is worth XX per brick, then my pistol ammo is worth XX per box"

I say let the flippers sit on their inflated price ammo until it comes back to the shelves at normal prices again,
 
It is only a matter of time now. I still call blow out phase starting in 3-4 weeks.
 
Our prolem is that the mechanics of supply and demand have broken down as a result of outside interference. ..... The only way this market (ammo prices and availablity) can return to a state of equilibrium is for the outside disruptive force (politics) to go away.

Exactly what I was going to say. This market is being driven by outside forces, namely the push for gun control and the panic reaction by gun owners and would-be owners. The crazy market will continue until the push for gun restrictions subsides, and that won't happen until several election cycles pass (if at all). I see shortages and hoarding at least through 2014, and if Hillary is elected President in 2016 (a very good bet), I see another round of panic worse than this one. Long-term, the demographics work against gun ownership. It's very hard to be optimistic.
 
I disagree that its a bubble. Bubbles are nothing more than price increases on a product thats not experiencing a shortage.

??? A "shortage" is always needed to fuel bubbles. The "shortage" is often a result of temporary and unsustainable new demand. Crazy behaviors, like standing in line (or taking out mortgages that one cannot possibly make the payments on barring a lottery win), is evidence for, not against, the extistence of a bubble. Unless people are suddenly shooting more, not just buying more, then the supply chain part of the pipeline is getting sucked dry, but the consumer is getting stuffed full. Lots who bought because "better get while the gettin's good" now have more ammo than they will shoot in 3-5 years.
 
??? A "shortage" is always needed to fuel bubbles. The "shortage" is often a result of temporary and unsustainable new demand. Crazy behaviors, like standing in line (or taking out mortgages that one cannot possibly make the payments on barring a lottery win), is evidence for, not against, the extistence of a bubble. Unless people are suddenly shooting more, not just buying more, then the supply chain part of the pipeline is getting sucked dry, but the consumer is getting stuffed full. Lots who bought because "better get while the gettin's good" now have more ammo than they will shoot in 3-5 years.
Amen brother!
 
Killian, I understand where you are coming from with your math and ratios, but how do you explain all the 22 ammo that was on the shelves 6 months ago? According to your figures we have not been producing enough ammo to supply the shooters for a very long time

That was actually my personal experience for about the last 2 years. Whenever I would go into Walmart to look for .22, it would often be sold out. Eventually I found some, but I *do* believe that our ammo makers were running close to that "edge" of Production Meets Demand. There was some to be had if you waited though. If I didn't find any .22 at Walmart after a couple of visits, it was usually there by my third. So no huge issues. But running so close to that edge meant there was no surplus. "Just in Time" production has been all the rage the last few years. What we are seeing may be one consequence of it.

Because what happened with this current mess is that you don't have 5% of gun owners going down to the store thinking "Hey, maybe I'll go shoot a couple of boxes like I do every three months or so". You've got people that are thinking, "Maybe I better get some of this ammo before the ban goes into effect...and I better do it right now!" All it took then was for this demand increase to be noticed by other shoppers. No one gave a d*** about how much ammo they had at the house until suddenly they realized stores didn't have it. Once stores shelves started to be more empty than full when people walked in, it stopped being 5% looking for ammo and is now 50% or more of the gun owning population thinking they need ammo. And not one or two boxes, but enough to last them for the next 5 years. Since they aren't finding that ammo on the shelves, it's panic time.

To put it in Economics 101 terms, the demand curve shifted. Production seems to have stayed constant, or at least not risen enough to meet the increased demand. So until people stop wanting it--which I think is actually unlikely until they are certain they have what they consider "enough"--or until companies can crank up the production--which also seems unlikely because it would mean massive long term investment in new facilities and costly equipment, all for a potentially short term panic, then I think this is here for the next few months or a year or two.

Some other poster on THR made a great analogy about increased production btw. I was pointing at the screen and mentally high fiving the guy who wrote it when I saw his analogy. He pointed out that when a restaurant is completely full, has a line of people outside, the restaurant doesn't go next door and build a new restaurant to handle a short term overflow. They just max their service and tables and enjoy the business. Perfect analogy.

So I have little faith that production is going to go up. The only way to deal with this is just ride it out. But it does bug me to read some comments about "There is no shortage!" "There's plenty of ammo!" Maybe if you live in middle Alaska and you are the only guy who visits the local "General Store" every six months. Maybe those places are still stocked up. Or maybe your store manager has a brother who owns Federal, or Remington and you get preferential treatment on shipping. But most everyone else--and my own experience from visiting local shops looking for ammo--is that little or none is to be had right now. Doesn't help to try and snow people into believing that what they can see for themselves isn't real. Just suck it up and realize this is going to last a while. If you prepared, good. Sell some of your stock to the desperate if you want, or don't. If you didn't prepare, then wait until prices come back to a more manageable level (even if it is not the SAME level as before) and stock up for next time.
 
??? A "shortage" is always needed to fuel bubbles. The "shortage" is often a result of temporary and unsustainable new demand. Crazy behaviors, like standing in line (or taking out mortgages that one cannot possibly make the payments on barring a lottery win), is evidence for, not against, the extistence of a bubble. Unless people are suddenly shooting more, not just buying more, then the supply chain part of the pipeline is getting sucked dry, but the consumer is getting stuffed full. Lots who bought because "better get while the gettin's good" now have more ammo than they will shoot in 3-5 years.
There was no shortage in the tech or housing bubbles. Under normal conditions price nrings the supply and demand into equilibrium but that is not happening here.
 
I like to shoot but I also know that the small stash I have compared to others on here is small. I have enough to last a year of my regular shooting, but when replacing it becomes a problem I tend to think the problem is with the distribution network. The big chains are getting bulk shipments and the LGS are struggling to get their orders filled. I think we need a more equitable arrangement for distribution.
 
Well, it is starting to get toward the end of April.

I just did a check on Gunbroker and I see signs of price peaking. I would say the average going rate for a brick of .22lr ammo is $60-$70 on Gunbroker and now I see sellers are starting to offer to pay shipping costs in an effort to keep the sale price stable.

The prices are no longer increasing, but have flattened out. The bubble is no longer blowing up, but remaining stable. How strong and stable is a bubble? Go ask your kids!

I still believe we need until the end of April and part of May to burst the bubble. Once it bursts, it will be overnight phenomenon and prices on Gunbroker will be down to $30 a brick shipped. Once flippers can no longer make 400% by standing in line at their Walmart on ammo delivery day, buy a brick of .22lr for $20 and flip it on Gunbroker for $60, that demand will go away and store shelves will start to show some inventory....

The people paying the $60-$70 prices on Gunbroker are holding the bubble together for the time being, but they will eventually get worn out. Once they balk at rimfire ammo costing more than what I can reload cast .357 Magnum rounds, it will no longer make sense to pay the high price and make more sense to shoot something else.

Cheers!
 
This is just a bump in the road.Anyone here besides me remember WWII? Practically overnight ALL U.S. production of everything was diverted to the war effort. Any ammo you had on Dec 7, 1941 had to last you till sometime in 1946. Now That's a shortage.
 
This is just a bump in the road.Anyone here besides me remember WWII? Practically overnight ALL U.S. production of everything was diverted to the war effort. Any ammo you had on Dec 7, 1941 had to last you till sometime in 1946. Now That's a shortage.

That's perspective!
 
Wait, we're in the "greed" phase?

That means I sold off half my .22LR on GunBroker during the "enthusiam" phase?

Man, was my timing off! Still, my 5000 rounds of Blazer sold for nearly $6/50 so I'm fine with it (especially as I paid what amounts to $1.29 a box for it).
 
There's no use trying to convince people with historical example, logic or fact.

If you're willing to pay $100/brick or wait in an early morning line for 3 hours, you'll continue to convince your self that things are not and will not get better. If you didn't, all your money/effort would be for not.
 
I think .22 will be one of the last calibers to recover.

People have seen the prices it goes for during a panic, and will continue to stock up on it when ever they can, due to its affordability (in normal times).

I currently have ~2000 rounds of .22, but plan to at least buy a brick each pay check when it becomes readily available again. Not to resale, just to have it on hand when another panic breaks out.

A guy I know did this before the panic, and I always thought that's a great idea, but never bought much .22, aside from a brick here and there.

I kind of regret that now :eek:
 
We also have a new type of buyer contributing to the shortage. Preppers. There is no better ammo than .22lr for a prepper. It will work for just about anything you might need a bullet for from squirrels to trespassers.
 
lol at the unprepared lashing out. Blaming others for their failure to prepare. Insert baby crying photo here.
 
Well folks,
The flipping days for .22lr is getting more and more difficult. People are waking up and not feeding the frenzy. I called the top to be May sometime and now we are going to see the gouge prices drop. See my original post on 3/21/2013:

"So, I am calling the top in later weeks of April with .22lr going for about $100 a brick at the online classifieds.

Once the top has been reached, we will follow the blow off phase all the way down to $20 brick everywhere including auctions and classifieds, which will take another three months. Once this happens, those flipping and hoarding will see the whole blow off and will ease up on demand. I predict July or August we will see .22lr ammo on the shelves at Wal-mart any day of the week at around $20 a brick."

The sold items on Gunbroker show proof! This is last 24 hrs of Federal 525 bricks.

federal5-17-2013_zps65af1bcf.gif

The flippers are finding it is no longer worth their while so their demand will start to let up.
If I was only smart enough to predict the stock market! I am just a lowly sheep herder's boy.
 
I bought a case of .22lr yesterday at pre-panic prices. It was there third case I have bought this year. It wasn't Walmart plinker stuff, though.
 
cpy911:
Either most Gunbroker/Armslist (TN) flippers/resellers are still as delusional as before, or many will soon be forced to compete for cash, and list it at $40-45 instead of $50 or so.

About a month ago on GB it looked as if most .22LR sellers on the first two pages received 0 bids.
Maybe potential buyers finally got the word from their older brothers that the price per round for puny little .22LR should be at most a fraction of the price per rd. for full-power Russian WW2 combat ammo (7.62x54R)?
 
I dunno. I was at sportsmans warehouse in albuquerque this morning killing some time before a flight. There was a line of at least a hundred people waiting to buy the store allowed max of whatever ammo was on the truck. The cashier guy said it was like that every friday, and that wasn't the whole line. It had gone down since peak time. Apparently they line up outside the store like black friday, waiting to come in. Crazy.
 

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