Guns as a hedge against inflation?

[PAI-Scott]

The more I think about our country’s current economic state, the surer I am the fed is going to ramp up the inflation rate. I don’t see any way the government can stem the tide of home foreclosures unless they flood the country with cash. This alone, with out the size of our looming debt makes me think its coming. Throw in the debt issue and I think several years of high inflation is a lock.

With this being said, I’m considering how to park a small bit of money in a fashion that’s protected from pending inflation. Although I normally don’t view my gun purchases as an investment I got to thinking it may be a good way to store value. Here’s my thought process.


Inflation kills the bond market, and stifles the stock market.
Commodities are too hit and miss for the in thing. Oil was hot last year; gold is hot this year, what’s going to be hot next year? That and the fact that I truly don’t understand them just about rules them out.
I don’t believe gun demand will be going down in my life time.
My gun purchasing, nor that of most of my friends slowed down much over the last 2+ years. I think guns are more like liquor than cars or houses. The cost is low enough and the benefit is such that you can justify the purchase in any economy. Therefore I don’t have to worry about the economic climate when and if I need to sell some.
Purchase desirable but not rare guns that are in good condition. Guns that should hold value and be easy to move in the future, as opposed to collector type guns that have a small number of buyers. Collector type guns probably are harder to sell in a down economy as they don’t have that price to pleasure ratio.
Purchasing used guns keeps me from shouldering the immediate depreciation of a new gun.
Shoot them, and take care of them. You get the benefit of enjoying them while you hold on to them.
Good lord willing and the creek don’t rise I never have to sell them.

So any of you think I’ve missed the mark? Keep in mind I’m not talking about cashing in the 401K, just investing a small windfall.

If you think I’ve made my case what would you invest it?

[deltaenterprizes]

That was my plan also, till I lost $50,000 worth of guns in Katrina!

[82nd airborne]

Wow, I havent cried in a long long time, but I would if I lost that many guns. I hope your family made it through ok, as that is more important.

As for buying guns to support my family in the event that the economy/government gets worse.......thats the excuse I have been using on my wife, and it works better than some of the other ones I have tried in the past!

Heres the thing with investing in guns as a financial endevour, you cant buy the ones you are fond of, you have to buy the ones the majority of the buyers are fond of, wich most times doesnt make sense, it is just whatever the gun writers are getting bribed into writing about with cash and bonuses by the big manufacturers.

Personally if I were you, I would spend at least $250,000 on nothing but guns from Delta Company Arms. I heard they were going to bazookle in value in the next year. Just the word on the street....

[Red River Rick]

Convert it into gold!

Bury the gold and in 30 years....................you'll be rich.

RRR

[btroj]

Like any collection, they would only be worth what you can sell them for.

I will stick with more traditional investments. Guns are a hobby and sport, not an investment, to me.

Brad

[Blammer]

guns, as in investment. no

the problem is selling them

in a tough economy, a really tough economy, no one will have the money to spare to buy one.

sure you may have bought that rem 700 30-06 for $400 and want to sell it at $500 but in really dire financial times, no one is going to have $500 let alone $400 to spend on an 'extra'. It's just not a necessity.

[starmac]

My 10-22 I paid 69.95 for new.
My 44 mag new cost me 175.00 for it and a box of shells.
My 39A I bought used for 100.00
I have others I paid as little as 25.bucks for.
I am pretty sure I could take any gun I own to a pawn shop and get more than I have in it.

[FISH4BUGS]

1986 bought Colt M16 for $750....today, easily worth $12,000
1990 bought S&W 76 for $600 - today easily worth $5500
1990 Bought UZI for $450 - now easily worth $6000
1990 Bought MAC11 9mm for $200, now worth $2500
1992 bought M11A1 380 MAC for $300 - now worth $3000
....and a few more besides......
....need I say more?

[JonB_in_Glencoe]

In 1992, a preacher told me to invest in Gold, Silver, and Cold blue steel.
I followed his advice, and missed out on the big money of the 1990s dot com boom.
I sold most of that investment in 1999 in preparing for Y2K.
I wish I still had that Gold and Silver I sold ten years ago.

In real bad times, Gold, Silver, and Cold blue steel are a good investment.
But, it seems Wall street likes it when a Democrat is in the Oval Office.
I'd stay in the Market as far as investing goes for the next 18 months or so.
Jon

[82nd airborne]

Why not take that money and start a business? Now is a great time to do so and you will get continuous returns if you play your cards right. Or refer to my previous post above.

[Old Shooter]

Guns make a very poor investment, I had over 200 in my lifetime, now have 40 or so. if you need money they are hard to sell for a fair price, a dealer will give you 30% of the used value if you are lucky. Finding someone who will buy it at a fair price is not easy, this is the voice of experiance speaking.
Even so I still buy guns but only used and at great prices. I just bought a blued Super Blackhawk made in 1984 in mint condition for $249.00. A deal is the only way I will ever buy again.

[Alchemist]

Look at what happened after the '08 election...selling off some ammo could have been quite profitable. Ya never know for sure, but my philosophy is that ammo (guns) will get you through times of no money better than money will get you through times of no ammo! :wink:

[firefly1957]

I have a few guns that are supposed to be worth a bit of money until you ask what you can get for them.
If things go south I would want a gun and some ammo, food and a place to keep warm and dry.
I know to many people who lost their rear ends preparing for Y2K to believe in calamity coming again.

I pray that it is not.

[Olevern]

Right now the used gun market is in a serious slump - too many people out of work and wanting to sell and too few who have the money to buy. Dealers are turning down guns at any price because the used gun racks are full and the stock is not moving. Probably not the best investment against difficult times (but don't tell the wife that).

[mtnman31]

I don't think it is a wise investment at all - too risky. Sure people could cite examples of "bought this double shotgun for this amount and sold it for this much more", but how many others could say the exact opposite, " I bought this Marlin model x and now it's only worth..." There are plenty of other investments that are more likely to net you gains and more likely to have a bigger payoff. You would be wise to stock up on reloading supplies (not as an investment, just a smart move) since the price of raw materials is likely to just keep on rising but I wouldn't treat any guns as an investment. They are sort of like cars - fun to collect but hard to sell and make a big profit on - and no I am not talking about those silly Barret Jackson auctions that in my opinion have falsely driven up the value of used cars. Just my .02 cents (you should invest that two cents I just gave you.)

[vintagesportsman]

If the economy tanks the real value of a firearm is in putting food on the table and protecting the family homestead which makes my guns, priceless.

[bigdog454]

In 1964 a silver dollar was worth $1.00 today the silver in a silver dollar is worth ~$23.00.
buy junk silver coins, a good investment and you can get in cheap or buy a lot.
BD

[buck1]

When times get tough lots of novice gun owners sell the gun first. Think about the record sells we have all heard about. Lots of guns to flood the market and knock down prices.

[bearcove]

The one thing that holds value over the long term is real property. As in land, raw or improved. It is one thing that can be sold at the price it is valued at. Now it has had a dip in value so is a good time to buy. Guns ,gold, silver are high, a bad time to buy as an investment. Unless you are sure it will go up more. Metals go up in value because it is used as a hedge against a weak dollar. Gold went to about 900 in the 80's, when the economy recovered it went back to the 200's and silver with it. $23 for silver is good. I've sold some.

[Heavy lead]

The one thing that holds value over the long term is real property. As in land, raw or improved. It is one thing that can be sold at the price it is valued at. Now it has had a dip in value so is a good time to buy. Guns ,gold, silver are high, a bad time to buy as an investment. Unless you are sure it will go up more. Metals go up in value because it is used as a hedge against a weak dollar. Gold went to about 900 in the 80's, when the economy recovered it went back to the 200's and silver with it. $23 for silver is good. I've sold some.

Agreed, if you have the cash, buy dirt. In the beginning of this housing mess raw dirt wasn't hit, now it is, you can pick up land right now, at least here in SW MI for cheap. It'll be back, so will housing if you can wait 10 years, we are on the backside of the curve here, some in other places are on the front side, so it may not be the case all over, it is truely a regional situation, But one we are all in to one degree or another.

[azcruiser]

Don't forget MAGS made some money back when the Clintons were in .Was going to Germany
about 5 time a year each time I came back I would have 40 or 50 pre ban Glock mags in my big
BOYT rolling duffel bag .Would fill out customs question sheet and declare HACHEZ'S CHOCOLATE
some books and Magazine's they never looked. Could buy them used for $15.00 and sell them for up to $50.00

[mousegun]

In any inflation the only condition that prevails is liquidity. If it can't be sold quick, carried away safely and hidden securely, it won't survive. Any impediment to those three conditions renders the object vulnerable.

There are three kinds of inflation: Keynsean (very mild - 1-3%), recessionary (4-9%) and runaway (Weimar/Confederate 10%-?).

In a Keynsean inflation taking place in a free society, guns would be a reasonable investment, but there are better (real estate, stocks, etc.)

In a recessionary inflation real property and business related investments succumb to taxation and government attempts at economic controls. Tangibles (gold, art, etc) become more attractive, but guns are not liquid enough because of social stigma to realize full appreciation. Guns become a dangerous liability as government action becomes more frantic trying to control the economy. Weak economies usually see growing gun control.

In a runaway inflation having guns can be fatal. They can't be shown, carried or bartered for fear of government reprisal. Guns are driven underground and are considered a threat to the state. The chief emotion in a Weimar type inflation is paranoia, and the usual outcome is some form of authoritarian regime. Hitler didn't tolerate much gun ownership.

The people who invest in guns contemplating runaway inflation are the guys who will probably mount an insurrection against the government that caused the inflation in the first place.

That is not a comfortable place.

Have a nice day.

[nicholst55]

In 1964 a silver dollar was worth $1.00 today the silver in a silver dollar is worth ~$23.00. Buy junk silver coins, a good investment and you can get in cheap or buy a lot.
BD

+1; run a web search on 'silver price history.' Junk silver coins should be at least 30-50% of your inflation hedge fund. When we say 'junk' coins, we're referring to circulated U.S. silver coins. Their value is solely in the silver content, not in collector's value. The silver content of U.S. silver coins, and their subsequent value, is well known.

Guns are largely a 'luxury' item- right up until you need one! Trying to sell a collector's firearm when inflation is running rampant could prove near impossible. Trading silver coins for food and other necessities may be the only way to survive.

[starbits]

What you invest in pretty much depends on what your goals are and what you are trying to protect against. Investing in something you can sell quickly to put food on the table is different than preservation of capital or trying to grow your nest egg. Investing short term is different than investing long term. It is like answering what is the best .45 boolit?

Some considerations though:

1. Invest in what you know and understand. If you know more than those you buy from and those you sell to, you will have a much better chance of success. Do your homework before you invest not after.

2. Before you buy, consider selling. Will you have to use a broker or auction house or other service that will take a big chunk of the selling price or sell face to face. If face to face are there actually customers where you are? If not how will you reach them. Will they actually recognize what you are selling and that it has value? For example you can buy silver, if it is a "quarter" people would recognize it and buy, but silver scrap they may have to take your word for and most would walk rather than buy. Homemade ingots - how do I really know what you marked on them is really what is in them.

3. What other factors could affect your investment. For instance South Korea has 87,310 M1 Garands and 770,160 M1 Carbines that may come back into the US after the Obama Administration disappears. I doubt those would be good long term investments right now.

4. There is a saying in the Art world, buy what you like because you can always enjoy looking at it. That is because after you walk out the door most art isn't worth a damn thing. 82nd airborne had it right when he said buy what other people like. You won't be selling to yourself, you will be selling to someone else.

5. Leverage is the way to turn small amount of money into big amounts. Commodities are one way of leveraging money, but 90+% of people lose money playing commodities. The way most people leverage is Real Estate, although that didn't work out too well the last couple years. However if you have the money and can get a loan, Real Estate is the place to be, but not just any real estate though. You need property that will work for you, rental property, with pain in the butt tenants who break things and constantly complain and call at the most inopportune times, but who also pay your mortgage and taxes so you don't have to. Boom times or not people will always need a place to live.


Investing in guns wouldn't work for me. My brain still thinks in early 1970's prices and everything seems overpriced to me. Couldn't tell a deal if it walked up and smacked me.

I am a meteorite dealer. I buy, sell, trade and hunt for meteorites. I know what I am doing and know how to contact my customers world wide. It is where I invest. And before you ask, no I do not recommend investing in meteorites. The only investment quality meteorites are old historic falls with museum labels. They kept and increased in value even in this economy. The point of this paragraph is if you want to beat inflation you need to buy the absolute best you can afford. Instead of 1000 coin silver quarters buy a single mint quarter of absolute top quality (an example not a recommendation). When it comes to inflation quality will out perform average every time.

Your comments about not buying collector guns because there would be fewer collectors in a down economy and they would be harder to sell is at odds with your stated objective of a hedge against inflation. Selling guns in a down economy is a hedge against job loss and keeping food on the table. These are very valid goals and if that is your situation hedging against inflation is much less important. If you are investing as a hedge against inflation, a down economy is when you should be buying not selling. Additionally the average Joe who has been or is hurting in a down economy isn't going to be buying an expensive collector gun anyway even in good times. The unaverage Joe who can afford $10k+ for a gun is going to be much less likely to be hurt by the economy and still be in a buying mood. Two years ago "after" the economy went into the crapper we had our best Tucson show ever. The small buyers were totally absent, but the big wallets showed up and bought a lot.

One last point, when I say quality I don't mean modern or semi-modern NIB stuff. I mean exceptionally good condition, old, historic, exceptionally rare, or unique items. That holds true whether you are talking about guns or coins or any other collectable. Good luck however you go.

Starbits

[Suo Gan]

For guys like us, guns and ammo are something that are a good investment. But, I think that you need to plan wisely and not buy guns that will not pay off in the future. I bought a half dozen Romanian trainer 22's 10 years ago. Don't think you can even get them anymore, but the point is that I have them. I also have quite a few bricks of 22's. I think these types of things will make great trade fodder in tough times. In fact, one of those rifles would probably have a higher value than my Beretta shotgun with the fancy wood. There are still some deals out there like that now. I think Mosin Nagants are one of them. But make sure to branch out the po boy retirement plan to other cheap opportunities as they come along.

[pbraceguns]

High capacity mags, lots of loaded ammo and components, couple thousand pounds of lead, lots of Pop-tarts, and loads of other non perishable food , along with numerous easy to move (read as inexpensive) firearms, plus enough non-Hybrid seeds to grow several acres of food have been my strategy for some time now. We also just purchased a 2000 gallon underground fresh water storage tank, and a filtration system that collects rain water.
Some of our friends say we are nuts. They all say buy gold, and that with that they can get the other things. When they are starving for the things we have, the gold will be easy enough to relieve them of. We have been canning and preserving most of our own food for several years now, and wildlife is abundant here for meat for the pot. I'm nearly tripling the size of the garden this year, and all my kids are getting in on the preservation of food for the future too, so they can provide for our 6 Grandkids if the SHTF. Might not be a perfect plan, but it's been implemented for quite a few years here.

[GabbyM]

One thing this nation has is plenty of guns.
You may want to consider investing in something people may find hard to come by.

[danielk]

+1 gabbym

Its estimated that their are 230-276 million firearms in the US and around 300 million people. Plus 4.5 million firearms sold annually. Supply and demand aren't in the favor of investment vehicle such as firearms.

[Char-Gar]

The price of common guns, may or may not keep track of inflation and much of that depends on current market conditions and the economy.

The price of shooter grade or lower end collector's guns will rise over time, but will have some of he ups and downs of common guns.

Pristine collector's guns, will always rise in price and they are for the advanced collector or investor. To be sold, you must find the right buyer. These folks don't show up in gun shops or at gun shows. You need to be in the loop to sell to these guys.

Then there are the super rare, one of a kind, or historical guns, that can rise in price in a dramatic way. But like fine art, they can also fall. This kind of stuff ebbs and flows and one sector of the market heats up or cools down.

As a general rule, you are better off with one super rare collector's gun, that several safe's full of common or shooter grade stuff.

But guns are like everything else in this world. It takes a buyer willing to buy and a seller willing to sell.

[Tazman1602]

Yeah but in 30 years I'll be dead.............................:kidding::kidding :



Convert it into gold!

Bury the gold and in 30 years....................you'll be rich.

RRR

[lwknight]

Starbits made a good observation and point.
I have a set of 125th anniversary SAA Colt 45 that were worth $3000.00 in 1980 and today are worth maybe $3.000.00 in a good market.
In 1980 that set would have traded 5 acres of sandy bottom land in N.TX and today would not even get a 1/2 acre lot.

Real estate is not liquid in a weak market. Inflation and depression go hand in hand.
Its a stagnation of the economy where nothing is for sale and no one has any money to buy anything. Real estate will gain dollar value in the long run but will not keep up with other commodities in a short run. Basically , you cannot sell the farm for what its really worth untill the economy goes back to a bullish condition.

The US would be sitting pretty if the powers that be would have listened to us dirt farmers and oilfield trash and had priced oil by the bushel of grain to a barrel of oil instead of US dollars while trying to rule the world by kicking the **** out of any country that wanted to sell oil in other currencies.

[Harter66]

Buying guns now is not all bad. I but 1 or 2 a year last year I got a 2fer for about what a hockshop would have paid. This year I've hit my 2fer I paid more than I wanted to,but less than the highest of the 2 brings in the current market. The trick is to get lucky with what comes your way and beat the other guy to it.

[Ohio Rusty]

If you can buy low and sell high, you'll do OK. Many folks have guns they bought many years ago cheap. Now they are worth more and command higher prices.

I have rarely made much of a firearm sale. Most times ...I seem to lose money. Stuff I think is really neat usually no one else is inerested in or has little value today.

In hard times ...guns will always sell. You may lose money, but you can always get money from guns if you need instant cash for bills and such.

Ohio Rusty ><>

[azcruiser]

From my point pf view the best thing is to not owe money . I have no house payment .no car payment,no credit card dept, no open accounts,good health care and some money in the bank and a nice garden.
Worry's would be Taxes, Fuel cost and supply,medical care again supply and cost and crazy people both legal and 20 million illegal ?
Isn't what you make it's what you have to spend in hard times. I for now don't have to spend much

[cajun shooter]

In 2007 my wife and I took a fishing vacation in Northern Arkansas. We have a small drafting business and we draw house plans the old way on the drawing board as we like the looks better and neither of us know CAD. My wife has been doing this for over 35 years and showed me how to draw on the board. When we returned home we had 4 customers cancel the drawings for new homes. Little did we know that was the beginning of the current recession. I have collected guns all my life and I am now 63 and I had quite a few. Some where over 50. We have had to sell every one of those guns to stay alive these past three years. I am down to my cowboy guns and a few hunting guns. As was posted some of my guns were worth much more than I was able to sell them for in this economy. In fact I lost money on the more recent guns that I had. One gun was purchased a couple of years ago for $750 and My best offer was $550. I had to take it and the buyer knew it. Some are like buzzards waiting for you to take that last breath. Guns are on the bottom and for the person who said silver I beg to differ. Gold is much better if you have the money to invest. I wish I would have purchased a box of a certain South African coin when they were cheap.

[bigdog454]

I, had said silver junk coins was a good investment. The reason being that paper may not be wort anything, but a silver dollar will be worth a dollar and will be accepted by anyone as legal tender. Junk coins are silver coins with no collectors value; their value is only in their silver content. I could not go to a store and buy a loaf of bread with a gold coin, but with silver dimes, quarters etc. yes.
It also depends on how many dollars you have to invest. If you have many thousands then buy land. a few thousands then get gold, I can only put a hundred or so away at a time, so for me it's junk silver.
Any commodity would be good for an investment as a hedge against inflation; copper, aluminum, lead etc. this could always be turned into cash quickly at the scrap yard. Guns can be a good investment, but if no one is buying what do you do.
BD

[GabbyM]

During the great depression they tell me about half the farm land around here was sold off to pay the property taxes. Prudential insurance Co. bought most of it for pennies on the dollar.
Did someone mention vultures.

If you have property you may want enough gold stashed away to pay the property taxes for fifteen years or so. With rates around here that's about half the current value of the property.

[Suo Gan]

Gold is not a good investment for the long haul, it is something to buy low and SELL high. Historically it always rides opposite of currency which is as cyclical as the seasons. If you believe all the little Donald Trumps that are popping up and telling you to buy gold and get filthy rich, you know it is NOT time to buy gold. Haven't you guys figured out the fact that if someone tells you not to do something is THE time to do it, and when someone tells you to do something that is the time to take a critical look at the reasons not to do it or getting the hell out...Am I the only one who knows that?

[lwknight]

I would never advovate that one should buy more gold than can be affordable.
You will not get rich from it.
I also think that not having some gold and/or silver for trade fodder is equally foolish.
Gold is and will always be universal money. How it compares to currency will vary.

[lcclower]

My 10-22 I paid 69.95 for new.
My 44 mag new cost me 175.00 for it and a box of shells.
My 39A I bought used for 100.00
I have others I paid as little as 25.bucks for.
I am pretty sure I could take any gun I own to a pawn shop and get more than I have in it.

Sorry, that's inflation you're riding. Like the real estate booms.

[GabbyM]

Ok so what are you going to use to pay property taxes after they monetize the national debt? Maybe you figure on still having a job. Unlike 17 million Americans right now.
Not much to me. I do own my home but have no gold and no money to buy any with.