westernrover
Member
- Joined
- May 4, 2018
- Messages
- 1,613
There was a thread a little while ago about at what point does one begin to buy. I answered that one foreseeing a continuing downtrend in the firearms and ammunition markets and indicating that I would consider buying when things returned closer to 2019 price levels. I have begun to see more favorable prices for buyers and greater availability of some items. Certainly, not everything is favorable yet and there are some market segments that are still very bad for buyers. Furthermore, I continue to forecast a downward trend in the short term. However, I am not able to call the bottom and I do see very credible risk factors that could create major disruptions in the supply chain and also generate high demand. It is advisable to begin buying where prices are favorable and to continue to buy and dollar-cost-average if prices keep falling.
Supply Risk Factors
The risk factor with the highest probability is a major disruption in the supply chain due to a financial crisis. While a debt-ceiling default is possible, it's not the most probable cause. Instead, we can expect the Federal Reserve to continue raising rates but failing to bring inflation down. The combination of higher rates and inflation will result in increased corporate debt and costs to service that debt. At some point, some or many of them won't be able to afford it. Inflation could be exacerbated if BRIC and/or OPEC nations adopt an alternative reserve currency (CBDC) and stop petrodollar recycling, dumping their dollar reserves into the US economy.
Demand Risk Factors
The risk factors for increasing the demand would be US involvement in war and 2024 political cycle. The most obvious risks of war are in eastern Europe and across the Taiwan strait or possibly the Korean peninsula. The most obvious reason for war is the issue of the global reserve currency and monetary policy leadership. The US has succeeded in isolating Russia financially but has hardened its resolve to trade in the energy market with an alternative to the dollar. China cannot so easily be isolated and its threat to the US dollar's status is greater than that to just Taiwan. The 2024 election hasn't shaped up yet, but we can expect that a Democrat controlled white house and congress will pose a risk of an 'assault' weapons ban or further restriction of popular items by bureaucratic fiat.
Current Prices
1000 rounds of Federal Lake City XM193 was $450 including tax and shipping. While some may recall lower prices in 2019, consider this price in terms of gold. I prefer to use gold instead of CPI or PCE, because gold is store of value that I can readily acquire and possess in lieu of guns and ammunition. With a spot price of $1845 at the time of purchase, and a $80 premium for Maples (Eagles/Bufflaos are $100), the $450 could have purchased 0.23 oz. gold. Compare this to 2019 when gold spot was $1300 at the begining of the year, and $1500 toward the end. Premiums were higher in 2019, but since this varies by the dealer, I'll use the same $80 premium. If we use the summer spot price of $1400 or $1480 with the premium, we could have bought .23 oz. gold for $340.
This thread What were 2019 ammo prices? | The High Road reviews what some ammo prices were in 2019. Based on it, XM193 might have sold for $250/1000 plus tax and shipping, whereas the cheapest import stuff might have sold for closer to $200/1000 plus tax and shipping. Tax and shipping varies, but could easily be $50, bringing the 2019 cost close to what today's cost is in terms of gold.
I'm seeing 9mm at 15 or 16 cents per round, compared to 2019 prices of 12 or 13 cents, but again, considering the loss of the value of the dollar of about 23% in terms of physical gold bullion coins, these prices are equivalent.
In terms of guns, I'm seeing S&W M&P M2.0 and Shields at $489 and $415 after rebate at Sportsmans. Glock 17/19 are $500. Ruger AR-15's are $819. All this is in-stock. I'm sure there are lower prices (check the price finders). I'm only making the point that many of the most popular guns are in-stock and at all-time low prices in real-terms. A $500 Glock today would have been a $389 pistol in 2019. I can't recall them being that cheap that year.
Near Term Forecast
I do expect prices to continue to come down, and for the availability in the smaller market segments (lever guns, big revolvers, high-end MSR, big bore magnum autos, etc.) to improve. I am also hoping to see reloading components continue to become more available and for prices to drop. I'm still seeing prices on primers, brass, and some powder at 50 to 100% higher than it was in 2019, and many niche items are unavailable.
Where the prices and availability are good, it is advisable to acquire needed inventory and dollar-cost-average (buy incrementally more) if the price continues to improve. I stocked up in 2019 and have been sitting out until now. I remember in late 2019, stocking up, but the GOP was favored to keep the white house and if the spring and summer had proceeded as expected, there would have been even better bargains all the way up to the election. I would have bought more, but obviously the unexpected happened well before November.
Supply Risk Factors
The risk factor with the highest probability is a major disruption in the supply chain due to a financial crisis. While a debt-ceiling default is possible, it's not the most probable cause. Instead, we can expect the Federal Reserve to continue raising rates but failing to bring inflation down. The combination of higher rates and inflation will result in increased corporate debt and costs to service that debt. At some point, some or many of them won't be able to afford it. Inflation could be exacerbated if BRIC and/or OPEC nations adopt an alternative reserve currency (CBDC) and stop petrodollar recycling, dumping their dollar reserves into the US economy.
Demand Risk Factors
The risk factors for increasing the demand would be US involvement in war and 2024 political cycle. The most obvious risks of war are in eastern Europe and across the Taiwan strait or possibly the Korean peninsula. The most obvious reason for war is the issue of the global reserve currency and monetary policy leadership. The US has succeeded in isolating Russia financially but has hardened its resolve to trade in the energy market with an alternative to the dollar. China cannot so easily be isolated and its threat to the US dollar's status is greater than that to just Taiwan. The 2024 election hasn't shaped up yet, but we can expect that a Democrat controlled white house and congress will pose a risk of an 'assault' weapons ban or further restriction of popular items by bureaucratic fiat.
Current Prices
1000 rounds of Federal Lake City XM193 was $450 including tax and shipping. While some may recall lower prices in 2019, consider this price in terms of gold. I prefer to use gold instead of CPI or PCE, because gold is store of value that I can readily acquire and possess in lieu of guns and ammunition. With a spot price of $1845 at the time of purchase, and a $80 premium for Maples (Eagles/Bufflaos are $100), the $450 could have purchased 0.23 oz. gold. Compare this to 2019 when gold spot was $1300 at the begining of the year, and $1500 toward the end. Premiums were higher in 2019, but since this varies by the dealer, I'll use the same $80 premium. If we use the summer spot price of $1400 or $1480 with the premium, we could have bought .23 oz. gold for $340.
This thread What were 2019 ammo prices? | The High Road reviews what some ammo prices were in 2019. Based on it, XM193 might have sold for $250/1000 plus tax and shipping, whereas the cheapest import stuff might have sold for closer to $200/1000 plus tax and shipping. Tax and shipping varies, but could easily be $50, bringing the 2019 cost close to what today's cost is in terms of gold.
I'm seeing 9mm at 15 or 16 cents per round, compared to 2019 prices of 12 or 13 cents, but again, considering the loss of the value of the dollar of about 23% in terms of physical gold bullion coins, these prices are equivalent.
In terms of guns, I'm seeing S&W M&P M2.0 and Shields at $489 and $415 after rebate at Sportsmans. Glock 17/19 are $500. Ruger AR-15's are $819. All this is in-stock. I'm sure there are lower prices (check the price finders). I'm only making the point that many of the most popular guns are in-stock and at all-time low prices in real-terms. A $500 Glock today would have been a $389 pistol in 2019. I can't recall them being that cheap that year.
Near Term Forecast
I do expect prices to continue to come down, and for the availability in the smaller market segments (lever guns, big revolvers, high-end MSR, big bore magnum autos, etc.) to improve. I am also hoping to see reloading components continue to become more available and for prices to drop. I'm still seeing prices on primers, brass, and some powder at 50 to 100% higher than it was in 2019, and many niche items are unavailable.
Where the prices and availability are good, it is advisable to acquire needed inventory and dollar-cost-average (buy incrementally more) if the price continues to improve. I stocked up in 2019 and have been sitting out until now. I remember in late 2019, stocking up, but the GOP was favored to keep the white house and if the spring and summer had proceeded as expected, there would have been even better bargains all the way up to the election. I would have bought more, but obviously the unexpected happened well before November.
Maybe I'll get a new .22 pistol in '23 and get back into rimfire plinking a big.
For what i don't load i stocked up while the getting was good. I did get into 7.62x39 during this latest shortage. Bought some factory ammo to get started. Im well stocked now with reloads for it.
