New Investment Markets

 

From the Wall Street Journal (h/t to Tyler Cowen)

 

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…it’s also clear that part of the gun-buying rally is driven by people like Mr. Chambers who are buying weapons the way others invest in a hot stock. The buying is pumping up prices. Many popular models of guns are back-ordered for a year or more. Some manufacturers are operating plants 24 hours a day. According to the 2009 edition of the Blue Book of Gun Values, the average price of European-made AK-47s — the famous Soviet-era military weapon now made in several countries — doubled from $350 last September to more than $700 by the end of 2008.

Bert Collins, an Atlanta commercial real-estate manager, recently bought two AR-15 rifles for about $1,600 each. He’s keeping one in its box, untouched, with the hope of selling it at a profit should Congress re-enact the law, which expired in 2004. “It’s certainly a better investment than my 401(k) has performed,” Mr. Collins said.

Bubba Sanders, owner of Bullseye Supply LLC, in Brandon, Miss., said he has “a number of doctor clients whose financial advisers have told them to invest in ammunition. Beats the hell out of money markets and CDs. You can double your investment in ammunition in a year.”

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I haven’t bought a gun in years (although recently I began pricing handguns for my wife). I do buy a fair amount of ammunition though. Luckily most of it is just shotgun shells which are relatively cheap, but I also like to keep some other ammunition on hand for my rifles and semi-auto handguns. I worry the speculative buying is going to drive markets through the roof. I partially blame the President on this though. He has sent a lot of bad messages out on guns and it would be nice if he began to clarify his positions. No matter what he says though, it’s a guarantee that gun owners won’t feel safe so long as he is in office. His record is just too poor to trust.