You’ve probably heard – with just about the rest of the world and all the global markets – that the U.S. economy has taken a turn for the worst. One of the big three credit rating agencies – Standard & Poor – has downgraded the United States’ credit rating from AAA to AA+. This is the first time the U.S. has had anything but the highest rating since there was someone to rate a sovereign country’s debt.
Sure your stock portfolio has probably taken a turn for the worse – the Dow Jones Industrial Average (or the Stock Market) fell nearly 6% yesterday alone. What’s very interesting though is that in this stagnant or declining economy, one economic market has actually been rising. Gun Auctions have been booming since the economy went south in 2008.
One such, James Julia, had one of his best years in his forty years of experience. In 2010, Mr. Julia sold around 800 historically important or rare guns for a total price of between $8 and $13 million dollars. Mr. Julia said in this article of the auction market in a downturn economy; “In great times you draw people in and they fight for things,” says Julia. “In bad times, you set realistic or conservative expectations (prices), and then have something people want. With a declining economy, people are preprogrammed to be more careful when buying and the auction creates the right atmosphere to take advantage of this. Get two bidders who think ‘I’m going to save some money and get what I want’ and they’ll drive the price up.”
Another interesting point brought up by a LA Times writer in this article about the gun market in the US right now, comes by way of economists who are trying to find new ways to gauge the strength or weakness of a sector and gather new data about current insecurities, fears, or attitudes by citizens. Instead of looking at GDP growth or stock market strength these economists look at the sale of pickup trucks to gauge the strength of small business owners – “sales of pickup trucks have risen at a 20% annual rate for the last few months. Pickups are often bought by small businesses, which bodes well for that critically important sector.” Or, on the more negative side, “gun sales have risen from a long-term rate of about 8 million a year to the current 14 million, according to Colas. Analysts initially attributed the rise to fear of tougher gun-control laws after the election of President Obama. But the continuing climb two years into his term points to a “deeper sense of unease,” be it over government regulations, crime or some something else.”