Hang in there, everyone. It won't be much longer. This ammo will pop, and sooner than you might think. Earlier I was thinking it would be popped by the fall, but now I'm thinking it might be more like Memorial Day.
A couple points to back up my claim, using basic economics.
1. The marginal utility of ammo is diminishing. Your second case is less valuable than your first case, and the third even less than the second. People who are hoarding ammo will eventually decide that their hoard is not worth adding to at current prices. At some point, the next 1000 rounds just isn't worth the money. The demand peaks and starts going back down.
2. Ammo flippers have to be able to MOVE the product they hoard in order for it to be worth their while. Because of #1, eventually people get all they will demand at that higher price, and they quantity demanded will not go up until price comes down. Like those who bought into flipping houses circa 2005, those ammo flipper who are latest to the game will lose BIG. Bubbles cannot last. Home prices crashed, and so will ammo prices. Eventually, some poor schmuck won't be able to sell a box of .45 for $50. He'll have to drop the price to move it, because inventory is negative cash flow-- it's money you spent and got only a storage problem in return. Not until it SELLS does it actually have any benefit at all.
3. The higher price tends to both stimulate supply and suppress demand. Both are good for leveling the market out.
4. Gov't contracts are almost all filled, so more production capacity will be coming online for the rest of us pretty soon. This is particularly relevant for 9mm and .40SW. There's not much .45 in use with police gov't agencies, relatively speaking.
I'm looking forward to being able to get .40SW for less than $20 a box.
A couple points to back up my claim, using basic economics.
1. The marginal utility of ammo is diminishing. Your second case is less valuable than your first case, and the third even less than the second. People who are hoarding ammo will eventually decide that their hoard is not worth adding to at current prices. At some point, the next 1000 rounds just isn't worth the money. The demand peaks and starts going back down.
2. Ammo flippers have to be able to MOVE the product they hoard in order for it to be worth their while. Because of #1, eventually people get all they will demand at that higher price, and they quantity demanded will not go up until price comes down. Like those who bought into flipping houses circa 2005, those ammo flipper who are latest to the game will lose BIG. Bubbles cannot last. Home prices crashed, and so will ammo prices. Eventually, some poor schmuck won't be able to sell a box of .45 for $50. He'll have to drop the price to move it, because inventory is negative cash flow-- it's money you spent and got only a storage problem in return. Not until it SELLS does it actually have any benefit at all.
3. The higher price tends to both stimulate supply and suppress demand. Both are good for leveling the market out.
4. Gov't contracts are almost all filled, so more production capacity will be coming online for the rest of us pretty soon. This is particularly relevant for 9mm and .40SW. There's not much .45 in use with police gov't agencies, relatively speaking.
I'm looking forward to being able to get .40SW for less than $20 a box.