Supply & Demand of Firearms & Ammo

FAlley
By FAlley on Wed, Mar 20, 2013 - 6:22pm

http://www.huffingtonpost.com/2013/03/19/obama-gun-reform_n_2909590.html?ir=Politics

The proposed assault weapons ban will no longer be a part of the legislative package to be voted on in congress. Instead, it will be voted on as an amendment to a bill including legislation against straw purchasing and (possibly, remains to be seen) universal background checks. The bill to limit magazines to 10 rounds is likely heading to the safe fate as the AWB.

To put it simply, this strongly suggests that the federal gun control legislation proposed after Sandy Hook will not pass.

In the past few months we've seen record numbers of firearms and ammunition bought up by the general public. Prices on firearms (AR's specifically) and ammnuniton rose sharply through December, peaked in mid-January and have receded since. (citation from TheTruthAboutGuns http://imgur.com/a/lBYri )

I've been looking through the interenet trying to understand some basic things about this. For example, why the run on ammunition when there was no proposed legislation against the purchase or manufacture of ammunition? What is has been the average person's motivation & mindset in putting significant disposable income into firearms, apparently at the drop of a hat? Just how far will prices (and supply) return to their pre-Sandy Hook levels, and how soon?

I've been trying to find answers to these questions and have found very little useful information. Most is the basics of daily events from Washington or a do-good reporter filming a GOTCHA LOOKHOWEASYITISTOBUYAGUN at a local gun shop. I'm writing this to ask if any members of this community know where to find information to answer the above questions.

On a more basic level : What mindset is it that has caused some significant portion of the country to suddenly purchase millions of weapons and arms en masse? I am honestly befuddled by this simple fact.

8 Comments

A. M.'s picture
A. M.
Status: Diamond Member (Offline)
Joined: Oct 22 2008
Posts: 2367
!!!

Foster,

Man, I really have been enjoying the quality and inquisition in your posts lately. Very much a breath of fresh air!
You asked:
"I've been looking through the interenet trying to understand some basic things about this. For example, why the run on ammunition when there was no proposed legislation against the purchase or manufacture of ammunition? What is has been the average person's motivation & mindset in putting significant disposable income into firearms, apparently at the drop of a hat? Just how far will prices (and supply) return to their pre-Sandy Hook levels, and how soon?"

This is paranoia fueled supply and demand. 
If someone tried to ban paper, the mills would be in full production and people would be buying every piece they could get. They'd buy pens, ink cartridges and all the things that go with it.

Because it's weapons, it's making a lot of ripples. The big reason is that gun people tend towards preparation and stockpiling to begin with. Generally, the type of people who think owning an fighting rifle is important feel like there is some sense of impending need to have it. Accompanying that could be a host of other problems; starvation, drought, illness/plague, lawlessness - ad infinitum. 

When you mix that with a president who's Marxist in his leanings, and supports a massive, invasive government, and you have a recipe for paranoia. 

I've seen this twice before, and there are also guys who think that this will be like the 1986 Firearms Owners Protection Act (with the Lautenberg amendment) that outlawed the production and sale of new machineguns. These guys are thinking that their semi-autos will be worth tens of thousands of dollars and are snatching them up on a hedge that they'll have a solid investment.

They won't, and the last times that this happened, these guys end up selling this stuff on the internet for less than they paid for them to pay off the credit cards they maxed out buying all this junk.

Point is, they don't need it, they panic bought with money they probably didn't have, and on the tail end of this we'll probably see market saturation. THAT will be the time to buy.

Just my thoughts.
Aaron

Hrunner's picture
Hrunner
Status: Gold Member (Offline)
Joined: Dec 28 2010
Posts: 256
"Likely" is the key word

Foster,

You raise a good question, but I sense a tone of derision in your comments.  Also in Aaron's comments.

Here are a set of points that may help understand the situation.

"The bill to limit magazines to 10 rounds is likely heading to the safe fate as the AWB".

Obamacare legislation was opposed by 2/3 of Americans, including many surely who did not even understand the depths of its corruption and poorly conceived policy.  It was still passed, by the Democrat congress, in the dark of night at the end of December.

Are the Federal Reserve appointment and oversight, TARP bailout, Stimulus Bill, Dodd-Frank, totally corrupt U.S. Justice Department, ill-advised and long and drawn out wars in Iraq and Afghanistan not self-evident reason enough to understand this sentiment of disgust and distrust?

We have a mathematically horrific fiscal situation and we have budgets proposed that increase government spending?

Shall we say more than a few people are distrustful that the American government can govern rationally and effectively?

The timeline may indeed be longer than some people think, and the resolution of these serious problems clearly does not have to end badly, but neither you nor I know the future.  Neither does the person who understands the depths of the corruption and dishonesty in government.  As I have heard on this site, would you rather be a year early or a day late?

The same calculus applies to precious metals, food, skills etc.  It's just that some see an immediate existential threat to 2nd amendment rights that is not evident in PMs, etc.  Believe that if the private ownership of PMs was being threatened by bills in the Senate, Kitco would be out of stock in 4 hours.

Given that, the situation the Founders feared but realized was a probability, could be seen to be unfolding.  For example, an out-of-control government, spending itself into oblivion.  Reckless and irrational things happen when powerful entities trap themselves into a corner (by their own corruption and inability to do the right thing).

This fear and anti-dote was manifest in the insurance policy codified by the 2nd amendment. 

Firearms are a fundamentally powerful tool, perhaps the most powerful tool commonly available, to control one's physical destiny, to some extent, by protecting one's homestead from short or long term lack of government order, and in the worst case scenario, protect a citizen from an overreaching government.

Is it still surprising to you that millions of citizens, the ones who are not indoctrinated statists and can still critically think, are buying firearms and ammunition?

My life experiences tell me to trust my family and myself, and my own inner compass and instincts more than to trust a public relations expert on CNBC or on Capitol Hill.

Oliveoilguy's picture
Oliveoilguy
Status: Platinum Member (Offline)
Joined: Jun 29 2012
Posts: 578
Government buys Ammo to dump Dollars

Correct me if I'm wrong, but the US Government has purchased 1.5 Billion Rounds of ammo. Another source says 2 billion http://www.breitbart.com/Big-Government/2013/02/17/Feds-Buy-2-Billion-Rounds-Of-Ammunition 

WHY? Because they read an article on Peak Prosperity and realized that their dollars will soon be worthless. 

FAlley's picture
FAlley
Status: Bronze Member (Offline)
Joined: Nov 2 2010
Posts: 90
Thank ya kindly for the replies

I appreciate the great discussion available on this site. The above comments are all absolutely valid. I'm going to continue to try and clarify where I hope for this conversation to go.

I agree with A.M.'s comparison of this time in comparison to the last buying frenzy in terms of simple economics. Anecdotally, I have seen men purchasing 2 or 3 AR-15s with accessories with little means of affording them. Taken en masse, I'd assume that means there will come a point in time when (and, with respect to Hrunner,  a most definite if) the weapons ban is seen to fail and the investment potential of assault rifles fails with it. When that happens it would be my guess that AR prices will drip (how much I do not know) and I want to figure what the firearm market will look like from there.

I, personally, do not yet own a decent semi-automatic rifle but believe I should make that purchase at the next dip in prices. I believe this for the exact reasons that Hrunner and Oliveoilguy point out. I'm also just curious what the sale of firearms says about the expectations of the future. Does this represent an expectation that crime will increase? That the government will come and confiscate guns? A domestic war? Political polarity? General fear of the times? This is a subject that fascinates me, and so I'd hope for a conversation on this specific aspect of firearms.

P.S. Over the past few months my entertainment has diverted into the great American domestic conflicts. Over the past 2 months I've read 1776 by McCullough, reviewed a history of Gettysburg and as I write am watching HBO's John Adams. The memoirs of Washington are next on the agenda. I cannot possibly imagine why it is I've become drawn in this direction =p

Hrunner's picture
Hrunner
Status: Gold Member (Offline)
Joined: Dec 28 2010
Posts: 256
Firearm investments

Hi Foster,

Appreciate your comments, and perhaps I can focus on your questions more (I'll try not to go too "Constitutional" on ya).

To clarify my own opinion, looking at the facts as we know them now, if I were a betting person, I would agree with you that the odds are against an AWB and magazine ban.  Even if passed, surely there would be an immediate court challenge by the freedom-promoting states' attorneys generals.  But my earlier analysis remains, for many this is not a Vegas-style wager of " oh well, I guess I was wrong- too bad I lost 10bucks".  Many see this as an existential threat to their 2nd amendment rights.  So the consequences of trusting the government and being wrong are very serious.

Expections- yes, all of the above.  Likelihood- probably low (10%? who knows?).  But consequences to you personally, in the event that 10% cashes in, are very high.  I don't see why from a rational perspective, this is so hard to understand.  What are your chances of having your house burn down, being involved in a serious auto accident, or having your house robbed in the next year?  Much lower than 10%.  Statistically in range of decimals of a percent.  Yet we all purchase home insurance and car insurance.

We as humans are limited because we operate very much emotionally (and often irrationally) on what has just recently happened to us, often in past 24 hours, much less in the past 24 years.  To that end, the U.S. has experienced a Pax Americana (at least to the folks living in the borders of the U.S.) since the end of WWII.  That's almost seventy years.  Ask a person in Kosovo, or Zimbabwe, or Somalia, or Argentina, (or now Cyprus) or numerous other unstable countries what the likelihood of an out-of-control government confiscating firearms, or bank accounts, or property is.  

Even the Germans, with the hyperinflation nightmare 70 years in their rearview mirror, are still terrified of inflation, because it was so real to them.  Not so much the U.S., even though I believe we are just at risk if not more so than the Germans are currently.   It all goes to your direct, recent experiences- which unfortunately do not line up well with actual real-world probabilities.

The whole point that Chris makes about failing to react to exponential change is a variation on this theme.  A corollary to the whole "exponential change appreciation" is that change must be fast and of high amplitude to be appreciated and acted on.  It is actually a biological constraint or design of our human bodies, thus must have a survival benefit (probably helped us to filter out the myriad of noisy inputs to enable us to focus on one important thing at a time).  But it has consequences. 

One has to be very objective to look at the facts on the ground, the actions of government, the connect or lack thereof between reality and government actions.  After studying human history and understanding human nature, we should make rational decisions based on a matrix of probability and consequences.  This is why I believe the like-minded individuals at this site and others, in contrast to the way the mainstream media tries to paint us, are very rational.

All this to say it may not be as irrational as you say to spend $1600 on a $1000 AR.  Parenthetically, I see people all the time spend $200- $400 on cell phones that will be obsolete in 2 years, $1000-$2000 on TV sets that will be obsolete in 3 years, $5000 on vacations that could have been replaced with a fantastic family driving trip to Mount Rushmore or the Bitterroots for 1/5 of that price.  Most well-made firearms have lifespans of reliable function measured in decades, sometimes well over 100 years.  That's a pretty well-made tool (and investment).

I would use caution regarding judging what other men and women may or may not have money to spend on.  I support the freedom of people to spend money on all the above electronic things, even if they are a poor buying decision (in my opinion), because it is their choice and their money. 

Finally, my advice (unsolicited of course)- you should own (at least) one reliable semi-automatic rifle for each family member that is old enough to safely operate one.  AR15 or AK74 for smaller framed folks or those who favor low recoil, AK47 or 308 semi-automatic rifle for larger folks that are able to better handle recoil.  Contrary to our friends Ms. Feinestein, Mr. Biden, and Mr. Obama who think 22 pistols or 'double-barreled shotguns fired into the air" are effective against multiple threats, I think a quick glance at the Syrian rebels or the 'Arab Springers' in Cairo defending their neighborhoods would suggest that those folks found handguns and double-barreled shotguns a bit less capable than modern magazine-fed semi-automatic rifles.

Oh and spend an equal or greater amount of the purchase price of the firearm on training, both static to work on marksmanship and dynamic (moving) exercises to be familiar with more real-world circumstances.  Final piece of friendly advice, get into excellent shape!  That's a safety issue as much or more than firearm handling and maintenance.

Be well.

GM_Man's picture
GM_Man
Status: Bronze Member (Offline)
Joined: Nov 4 2012
Posts: 74
re:'Likely' is the key word

Good morning All,

Great posts!  I can't agree more with some of the comments.  FWIW, I've said it before that 'It is a matter of trust.'  If the majority of the US residents had trust in our leadership many would NOT be buying firearms and ammo is such quantities.  End of story.  I am not going to point out any one particular individual or political party for that lack of trust.  There have been a number of items that have attracted my attention: the overall erosion of the Bill of Rights (read up on James Madison), the global economic condition (read up on Jefferson's point-of-view on banks), poor legislation (what better examples than ObamaCare and Feinstein's Assault Weapons Ban, I mean it READ them), the opinion on why killing US Citizens is justified (AG Eric Holder versus Bill of Rights), and finally poor decisions by the Supreme Court (ObamaCare, and Citizens United).

It is NOT one item, such as the billions of rounds purchased by DHS, but all such things. Is the market for firearms and ammo driven by the hope of financial reward?  I could see that in part.  I understand that since 2008, a modern sporting rifle increased in price when all other assets fell in price.  That trend seems to stay true.  So why not purchase another such rifle with large-capacity magazines?  It the market driven by fear?  Sure!  We have New York, California, Illinois and others driving an attack on the 2nd Amendment.  There is plenty to fear.  These same states have outrageous crime rates.  Most large urban areas have high crime rates.  Our leadership don't know how to deal with high crime rates, and what drives normal citizens to commit crime.  So they generate fear by seeking to ban or control or even confiscate firearms. In the end, it is all supply-and-demand.  I sure hope that prices come back to 'normal' and that ammo returns to store shelves.  I mean really, how much ammunition can one nation purchase?

As an independent, I only say, that it is a Matter of Trust.  'In God I Trust' all others pay in silver, gold, or ammunition.   

Keep the posts coming!  Cheers!

Jdcstar's picture
Jdcstar
Status: Member (Offline)
Joined: Feb 10 2011
Posts: 2
Ammo Taxation

Here in Texas, ammo is in short supply being rationed when it is available.  My biggest fear is that our government will not try and take away our ammo, just tax it so severely that we will think twice about buying a box.  Think about the price of a carton of cigarettes today vs. 10 years ago. 

 

People laugh at the notion of Texas seceeding from the Union.  I wonder why Gov.Perry is attempting to have $1,000,000,000 worth of gold builion moved from the bank in New York back to Austin, TX.....

earthwise's picture
earthwise
Status: Platinum Member (Offline)
Joined: Aug 10 2009
Posts: 846
I'm not laughing!

 

Jdcstar wrote:

People laugh at the notion of Texas seceeding from the Union.  I wonder why Gov.Perry is attempting to have $1,000,000,000 worth of gold builion moved from the bank in New York back to Austin, TX.....

I'm cheering you on! I'm hopin' that TPTB will sit up and take notice that there's some of us that are  "....mad as hell and aren't gonna take it". If y'all actually pull the trigger you might just end up with a whole lotta company flowin' in from places like.. oh, I dunno... maybe from right here in The Republic of Kalifornia!

If ya got billion $ worth of gold backing your new Lone Star Currency, I'd say the opportunities are a whole lot better than the so-called 'Golden State' that's now bankrupt.

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