So much for hope. Even Barack Obama says the economy will get worse before it gets better.
In the meantime, freaked out New Mexicans are putting their money where they can see it: at home, under lock and key. And they’re packing heat, just in case.
For metals dealers like Gregg Hoffman, an owner of Premier Precious Metals on Cerrillos Road, the financial crisis has provided a kind of vindication. “For many years, stockbrokers treated metals—silver and gold—as being something that only nuts and idiots would have anything to do with,” Hoffman says. “Well, it seems like there’s a lot more nuts and idiots.”
To those who still make a living in traditional finance, hoarding gold is just as crazy and stupid as ever. “Gold is not an investment. Gold is pure speculation,” Santa Fe investment adviser Keith Anderson says.
State regulators agree. Gold bullion is “not really what we would consider an investment, and it’s not monitored by the state,” Bob Hagan, who leads New Mexico Regulation and Licensing Department’s investment education program, says.
“People need to be cautious,” Hagan warns. “What we’re worried about most is people taking inappropriate risks with their savings in an attempt to recoup their losses.”
Anderson says the move toward so-called alternative investments is driven by “greed and fear, greed and fear.” And panic makes for bad judgment. In the early ’80s, he notes, “gold was about $850 an ounce. Today, it’s $770 an ounce or less. If you bought gold 20 years ago, you’d be down.”
Hoffman’s customers view the current low prices for metals more optimistically. “With prices down, it looks like a bargain to people right now,” he says.
A bargain, if you can hold on to your stash. After “frequent” calls from customers who kept their coin collections under their beds, only to have them stolen by burglars, Hoffman tells customers to store their coins in a safety deposit box at their local banks.
But then, if they don’t trust the financial markets, why should gold hoarders trust the banks?
John Cunningham, who owns AB1 Locksmith Services on Cerrillos Road, says sales of home safes have increased 60 percent in the past three months.
“You can tell people are changing their saving habits,” Cunningham says.
And if a half-inch of steel doesn’t make a gold hoarder feel his or her “investment” is secure, perhaps 9 millimeters of lead will do the trick.
Tina’s Range Gear on Airport Road has been doing brisk business in firearms of all types. Assault rifles are back-ordered nearly seven months, employee Bruce Yilek says.
Following a nationwide trend, demand for guns has been “out of sight,” Yilek says, because the recession has people feeling “paranoid, rightly or wrongly.”
Bill Rooney, who owns Outdoorsman of Santa Fe at DeVargas Center, has seen a similar run on guns. “I’m not going to give percentages, but it is significantly higher this year,” he says. “It’s a nice aberration, really.”
Rooney says in addition to the prospect of stricter gun laws under an Obama administration, the relentlessly bad economic news has customers worried.
“In uncertain economic times, people invest in precious metals and firearms—and these are uncertain economic times,” Rooney says.
(The New Mexico Department of Public Safety received 1,016 new applications for concealed handgun licenses in September, October and November of this year—a 54 percent increase from the same period last year, according to DPS Sergeant Suzanne Skasik.)
Precious metals and live ammunition may provide reassurance should civilization fall. But what about creature comforts?
Jose Perez, an assistant manager at the Home Depot on Richards Avenue, says sales of gasoline-powered electrical generators are up; sales of wood stoves for home heating have “spiked.”
The survivalist economy has its own bizarre trickle-down effect. Along with the trend toward wood stoves, there has been a surge in chain saw sales, according to Loren George, who manages his family’s business, Santa Fe Power Equipment Sales Inc. on Jorgensen Lane.
“There’s a lot of people cutting wood now that didn’t have to before—trying to save a buck, right?” George says. “It seems like when times are bad, our business flourishes.”
As a bonus, a chain saw can double as a home protection device, should you run out of ammo.