Discussion in 'General Gun Discussions' started by Big Bill, Feb 26, 2009.
Well, on second thought, don't take it there; take it to the gun safe instead.
The majority of production being purchased by the DoD and other fed agencies doesn't come from "civilian factories". Instead they come from ammunition plants. They are government-owned contractor operated facilites, GOCOs. They are not commercial operations in the sense of Remington or Winchester and when government demand is reduced they will reduce production and then put lines on standby ceasing production on those lines. If there is no anticipated demand, the DoD will mothball those lines. There will not be any significant excess production from the GOCO ammunition plants.
OTOH, the real commercial ammunition manufacturers, like Winchester and Remington will continue to manufacture ammunition and if they were dedicating any production to filling DoD or Fed LE orders those may get to the public as the Fed moves their order to the GOCO ammunition plants.
Will this cause a reduction in the price of ammunition? Probably, but by how much is anyone's guess.
As to firearms prices...Where's the crystal ball and ouija board? Sorry, no one knows, but the best guess I can provide is look at firearms as any other commodity and apply simple economic models. If nothing changes the number of people who want a firearm will eventually be converted to people who have a firearm and unless production is reduced there will be a gradual glut and prices will fall. If production increases (like it has) that will happen sooner.
Here's a recent article concerning the root cause of the ammunition shortage. Interesting stuff.
The pawn shop dealers are seeing how much people will pay for an item, if they know a mini-14 will bring $750.00 do you really think they will drop the price down to $450.00 next year?
Sigh... Right, but the question is "when is the point when people will no longer pay $750 for a Mini-14?" Nobody is arguing that sellers will suddenly start selling under market rate.
The issue is that people won't keep buying 2 EBRs a month indefinitely for the next 10 years. Either there will be a change in legislation, or the pace of buying will slow dramatically. If the pace of buying slows before the pace of production slows, or if the producers have spent good money ramping up production and would rather sell at small profit than scale back down, then the price of guns could drop dramatically.
Likewise, if folks become reassured that a new AWB is not immediately forthcoming (some notable judicial find on Heller, big reverses in 2010) they could dump a ton of AR receivers back on the market and saturate it.
The current "panic" is not indefinitely sustainable, the current high production is (for all practical purposes) indefinitely sustainable without new legislation. There is more aluminum billet and parkerising spray in the U.S. then there are potential AR-15 buyers.
No, actually, they didn't. They knew exactly who it would be. It would be the same thugs they had seen in the streets for the past decade or so, beating political opponents with clubs, smashing up Jewish-owned businesses, and generally terrorizing the populace. You know, the guys with the brown shirts who became the guys with the black uniforms. Have you seen anything like that lately? I haven't.
So can we stop with all the Nazi talk?
Back to the OP... Another factor to consider is that a lot of these recent gun and ammo purchases were impulse buys by people who aren't really dedicated shooters but are afraid of unrest brought on by the economic crisis. Once they've got their AR in the closet, they're pretty much set. Also, they're unlikely to shoot up the ammo that they bought, so they will have no need to buy more. Combine that with the speculators who got in the game a little bit late and are sitting on too many guns that aren't moving, and you'll start to see prices dropping. Also bear in mind that fears of a new AWB can cut both ways; if there's a fear that there will be no grandfathering, people, especially speculators, will be dumping guns that they're afraid may be unsellable in the very near future.
If the S really does HTF the way some people are predicting, prices will be meaningless. We'll be bartering gold and gasoline for our ARs and ammo. Good luck!
The smart money right now is on .45's, revolvers, and rifles that have never been the subject of mainstream liberal interest. I have seen prices on the guns become quite appealing. Personally I would rather spend $600 on a Colt .45 than a Glock which is what some fruitcakes are asking. Also, look at the number of sweet Colt revolvers that are coming up for sale.
I pretty much have my SHTF stash covered. Once I have a few thousand more rounds I will focus exclusively on what I love to collect and shoot.
ammo may go down, maybe lead and copper as well.
"The smart money right now is on .45's, revolvers, and rifles that have never been the subject of mainstream liberal interest. I have seen prices on the guns become quite appealing. Personally I would rather spend $600 on a Colt .45 than a Glock which is what some fruitcakes are asking. Also, look at the number of sweet Colt revolvers that are coming up for sale. "
Exactly correct. Over the past several months I have traded away a bunch of guns which had doubled or tripled in value for no good reason, and acquired a string of ponies (vintage Colts) I never would have been able to justify acquiring, otherwise. Trading an autoloader which has tripled in value is the same as getting that vintage Colt for 2/3 off.
"prices only go up on manufactured goods, never down"
Not at all. If you follow the prices of automobiles as a function of household income over the last century, you'll notice some interesting things. Car prices fell for decades, both in real and in nominal terms. They started rising in response to safety and environmental regulation, and hit the stratosphere in recent decades when credit got loose and anyone could finance a new car. Those days are over, and car prices have been falling so far this year.
Private airplane prices are even more interesting to follow. Pre-owned light aircraft prices are in a tailspin.
Gun prices have been doing some strange things lately, and not all gun prices have been rising. It's fascinating to me both as a hobbyist and as an analyst.
Perhaps I'll track the price of AR-15 & WASR's between now and then.
While they have failed to stabilize the credit markets and while they have destroyed confidence and value in the stock market, the inflation that must result from greatly increasing the effective money supply (in mostly non-productive ways) may well make ammo the only viable currency of the future.
I have been going to gun shows for the past 10 years or so, since november I have never seen as many people there, or as many people buying. I have a feeling there are more people wanting than getting. Mostly because what they want is not there, someone already bought it, if there was a gun you really wanted and you had the money to buy it and only one person had it wouldnt you pay more just so you could have it? Just like the AR deal right now, people that have them can put 200-350 more than they paid 6 months ago on one and sell it before noon at almost any gun show.
hell can people be running low on AKs? WASRs are produced in Romania. If you tell the Romanians, "we expect a huge demand, could you please ramp up production, you'll make a lot of money," I'm 90% sure that they'll hire our for more employees and make more guns. There's also a couple other foreign companies that could jump on this bandwagon.
Next, ARs... how many AR-15 manufacturers are there in this country? Quite a lot. How hard is it to make an AR receiver? You basically just pour a mold (In 5 minutes there will be someone to come along and tell me that it is super-involved). If it's harder than that, it's still not rocket science. The little parts (grips, etc.) for the gun are in abundant supply. Barrels... I know Green Mountain is the main producer, but you're telling me that nobody else produces AR-15 barrels? Getting specific models I could see as being difficult, but getting a hum-drum set-up? Come on...
Honestly, I think there is collusion here to keep prices high for as long as possible. If this happened in any other field ("OMG! They're going to ban milk! Now it's $15/gallon!) nobody would put up with it. In the world of guns, there seems to be a high percentage of masochists who like to see people struggle financially to own weapons.
Ok, you're wrong.
Just look at the idea of making more receivers. How many investment casting or hot forging molds/forms are there? They each cost thousands of dollars to make and then they require hundreds of thousands of dollars in equipment to use. How many companies want to invest in these new molds/dies and the equipment to make them?
But, let's look at he real bottleneck.The choke point for AR production is barrels, bolt carriers and barrel extensions. All the companies that make ARs get these parts from one, two or three manufacturers in the US. Production can be ramped up only so far so fast and then you have all the production equipment in use at a facility. "Buy more", you say? "Put it where", is the response. These businesses don't have a lot of excess production capacity in place and they don't have bigger facilities than needed. Having idle equipment/personnel/space is a quick way to go out of business.
"Buy more". With what? The manufacturers have to get credit to purchase the equipment and we're all aware of the current "credit crunch". Who's going to loan the money?
"Build more". With who? Where are the skilled workers to run the CNCs, heat treating furnaces, coating equipment, etc. that the manufacturers can't purchase with the current credit crunch in full swing. Where would they put them? In the buildings they don't own with the supervisors they don't have? And how do you handle all that even if you can get the credit for the equipment and facilities?
Do you just throw money at the problem and proceed with no business plan? What's the point if you turn your profits into equipment and facilities and personnel you won't need in 18 months when the demand is met? Feed the demand and then go out of business because you blew all your money meeting a short term demand?
No, it ain't "that easy".
Doublestar was in a position to pretty much move fast since their business plan was to add equipment, staff and facilities within the next 3 years as they grew. They just advanced their plan by 3 years and got to work.
Priced an HD TV or Computer lately compared to say a couple of years ago?
At todays prices, the best advice, from another thread was:
Pile your money on the table, if you'd rather it be an AR (or whatever) than a pile of money, buy it. Maybe you could buy it cheaper next year, or maybe it'd cost even more, or you might not be able to buy it at all.
However, my sense is that price swings initiated by fear of impending legislation tend to be pretty severe. It's a prime example of a herd mentality--maybe the generalized fear is based on comon sense, but it feeds on itself, creating panic beyond what is justified. Once most people regain their composure, the attempts to return to a state of equilibrium; if you can figure out the timing of the trough, you may get some good deals.
Though its genesis was not rooted in fear over impending legislation, the Beanie Babe thing of a few years ago illustrated this type of phenomenon pretty well--these little stuffed animals, with MSRPs around $5.00, sometimes fetched $100 or more. This rush to buy was fueled by the perceived rarity of the "limited" production of these little stuffed animals, and some resellers made a bundle of money. Ultimately demand collapsed and they became pretty much worthless.
While guns are a more expensive product, the same cycle is likely to be seen here. If people find, at some point, that they have bought more guns than they really need--and especially if their fears about gun control legislation do not come to pass--then it's inevitable that prices will fall.
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