Ammunition is an often overlooked valuable hard asset. It is useful for many real-world purposes such as training, self-defense, and hunting. A single round of ammunition is a collection of commodities such as lead, copper, brass, and nickel. The price of ammo is relatively stable with the cost of the raw material and the energy input needed to manufacture each round creating a price floor. However, market forces and supply and demand can lead to windows of opportunity where the price of ammunition jumps dramatically. We saw this in 2013, 2018, and 2020 when the market witnessed nationwide ammunition shortages and 3-4x price increases.
Compared to Gold
Ammo is tangible, useful, and valuable. While gold is also a tangible asset, its usefulness is limited to industrial applications and jewelry. Ammunition is arguably significantly more useful to the common owner and can be a store of value when it isn't being used for its more traditional purposes of practice, competition, self-defense, and hunting. Like gold, there will always be people willing to trade for ammunition, its intrinsic value will never be zero.
Compared to Cryptocurrencies
Cryptocurrency such as Bitcoin has made a mainstream appearance over the past few years. Its value as a transactional tool is not in dispute. Its price stability is questionable with the likelihood of it being +/-50% in 6 months being high. At this point, Bitcoin is good for speculation but does not have enough history to be a good hedge against inflation or times of uncertainty.
Ammunition is time-tested. It has been an essential component of firearms for centuries. Since the invention of gunpowder and the development of early firearms, ammunition has continuously evolved and improved to meet the changing needs of users worldwide. Throughout history in various situations, ammunition has demonstrated its effectiveness, dependability, and desirability - with the most dire showing the greatest need for ammunition.
Practical and Tangible
Ammunition serves a practical purpose as a consumable item in firearms for various activities such as self-defense, hunting, and recreational shooting. Unlike digital assets such as crypto, stocks, and bonds, ammunition can be touched, held, and used in the physical world. This makes it a valuable alternative asset that is tangible and can be bought, stored, sold, and generally relied upon as a store of value and for it's intended use.
Ammunition as an Inflation Hedge
Is ammunition a good hedge against inflation? Ammunition and gold share many common traits: they are both valuable and tangible. In other words, real things you can hold in your hand. Their values will never drop to zero. Ammunition is unlike other products in our society and lends itself well to stockpiling for an unpredictable future.Read More