Word Of The Day: Tulpenwoede

As ludicrous as this is, history shows us that it could be worse. Much worse. In January, 1637 a skilled craftsman in Amsterdaam or Den Haag could earn about 300 Dutch Florins a year. That same month, a single ‘Viceroy’ tulip bulb could sell for between 3,000 and 4,200 Florins . . .

That couldn’t go on for very long, and the bubble burst in February when no buyers showed up at the regular Haarlem tulip bulb auction. By the end of May, single-color bulbs were again sold by the pound and exotic ‘Bizarden’ bulbs like the Viceroy were selling for just 1% to 5% of their peak prices.

Yes, I know I’m comparing flowers to firearms. Dutch florists never faced a looming Assault Tulip Ban, but you should still keep in mind the total cost versus the final value of what you’re buying. A $400,000 tulip bulb is still just a tulip bulb, and a stripped lower is just a $500 paperweight without a raft of parts, components and ammo which are just as scarce and just as overpriced right now. “Build Your Own AR Later”? Yeah. Much later. If ever.

So don’t bother calling CDNN to order one of these lowers anyway. They only had a handful of them, and they’re almost certainly gone by now.

 

comments

  1. avatar Casey T says:

    Why would anyone care about a single digit serial number? I sure wouldn’t.

    1. avatar Gov. William J. Le Petomane says:

      Perhaps if it had a single digit price tag as well.

      1. avatar Sammy says:

        I would not refuse an M1 Garand or an original 1911 in .45 with a single digit serial number, if anyone is in a gift giving mood.

  2. avatar Ryan says:

    Lost a lot of love for CDNN on this one

  3. avatar dirk diggler says:

    I am saving up to buy when the crash happens. And it will. And I will stock up. A lot. It is inevitable.

    1. avatar Rob says:

      Waiting for that as well. A lot of hoarders and flippers that stay in too long are going to try to unload.

    2. avatar John Fritz says:

      I’m not trying to be contrary but… We’ll see. Pricing in the AK world never ever returned to anything near the pre-’94 AWB pricing. I lost track a long time ago on how many snarky, self-serving forum posts I’ve seen where the guy bought his unobtanium-coated MAK-90 for $17.00 back in ’91. And has told us all about it. Multiple times.

      Someone who paid two large for a 6920 isn’t going to sell it to any of us for $950.00. I don’t think.

      1. avatar racer88 says:

        You’re right… he won’t even get $950 for it… when we can buy it brand new for $950. If he wants to sell it at all, it will have to be below the cost of a new one… or he can keep it. Such are the vagaries of a free market.

        1. avatar The Pit Boxer says:

          But will manufacturers keep the MSRP that low, now that they’ve seen what the second-hand market brings in? How long will it be before demand slows and retailers bring the prices back down? When an LGS lists one for $1500 it will still be gone in minutes because it’s the lowest people have seen in months. How long before they can stay on shelves longer than a day at under $1200?

        2. avatar AlphaGeek says:

          When we pass the peak of the demand curve and go back to a competitive market in 2014, this will cease to be an issue.

          We’re not talking about a finite resource like surplus Eastern Bloc rifles here, which will eventually run out. The product in question is basically an open-source design that can be manufactured in volume quite economically with modern CNC manufacturing equipment.

          As long as prices remain high it will be economical to manufacture AR-pattern rifles from raw bar stock instead of forgings and castings. Competition will then drive the price points down, and at some point the output of forged/cast parts will catch up. Problem solved.

    3. avatar Anmut says:

      I think the bubble is already starting to burst. If you look at Armslist there are hundreds of WAY overpriced AR’s and AK’s for sale, and the kicker – nobody is buying them. Because of the last AWB and Obama’s election and subsequent reelection all the AR’s and AK’s had already been bought and stuck in the safes by people that realize the danger liberals are to guns. Now they are flooding the market trying to make a quick buck on the people that didn’t.

      1. avatar Joke & Dagger says:

        You guys remind me of the people poking their heads outside when the eye of the hurricane is passing over. Part 2 is just getting started.

  4. avatar Pantera Vazquez says:

    When we see these type of price bubbles, one needs to question-is this is going to create another credit fiasco? Bear with me a second……a stripped lower for the price equal to a complete rifle just two years ago, dollar plus per round on ammunition that sold for a third of that just a couple of months ago, and empty shelves all across the nation. Did any of you get a 300% raise? I sure as hell didn’t, heck most of this country’s folks have seen fiscal cutbacks of their own. So the question that follows is-how is everyone paying? If it is plastic, it might come back to bite everyone on the ass. What are you gonna do to pay the interest…..how you gonna recoup your investment if/when prices crash?

    1. avatar racer88 says:

      I’m laying low and not partaking of the panic. Over the last few years, I bought guns and stocked up on ammo and magazines. I am quite “good to go.”

      I predict this will all settle down and no significant legislation will pass. Demand will subside. Supply will go up. Prices will come down. All will be well. Then I’ll go back to my slow but steady purchases of gun goodies and be ready for the next panic.

  5. avatar Thomas Paine says:

    Extraordinary popular delusions and the madness of crowds.
    my crystal ball says sell into strength, but these aren’t shares that i might be able to buy back later.

  6. avatar Lolinski says:

    I wish I had serial number six of a firearm (lucky number) But it isnt so important that I would pay 500$ for it besides you can make your own receiver (both AK and AR)

  7. avatar Javier says:

    The real bad thing is not just the price. It’s that you can’t find the parts at all anywhere.

    1. avatar Triggernoob says:

      I’ve seen no-frills BCGs on eBay going for $350! What the deuce? LPKs going for $150. Everything’s more than double the pre-panic prices.

  8. avatar dom says:

    I see no ban on “assault weapons” but possibly mandatory background checks on all private sales as a likepy outcome of this mess. If that happens, the price on these lowers will really crash. Not only will new production lowers still be coming online, but these guys unloading their “investment lowers” will have to go through the hassle and expensive of FFL transfer. I don’t know about you guys, but if lowers are selling for $80 again at gun stores, how much cheaper would the private sale have to be since we would go to the store for transfer anyway. My kitchen table FFL only charges $20 per transfer. You have to work around his job schedule. That means I would be willing to pay $45(plus $20 transfer $65 total) for a private transfer lower. Otherwise I could just walk into a LGS, at my convenience and pay $80 for a lower. I think the market for all this will crash hard. Even harder if all private transfers must go through an FFL.

  9. avatar Glimmer says:

    A lot of people are going to have put money into these guns that they can’t get back. Because either (A) the proposed AWB will pass, prohibiting their transfer, or (B) it won’t, in which case prices will return to normal.

    1. avatar full.tang.halo says:

      This assumes that DiFi’s wet dream passes. If a rehashed AWB 1.0 gets passed and transfers of “pre-ban” items are ok, say as long as they go thought a NICS check, future stock wont be able to be built up in pre-ban configurations. If that is the case, then market prices could stabilize at current levels and even increase as more people get into shooting. Look at transferable MG’s, a $300 mac in 1989 is now $3500-$4000, fixed supply and expanding demand.

  10. avatar BLAMMO says:

    No matter what, these are “bubble” prices. Markets have “blow-off” tops and no matter how many times people see them, they fail to recognize them until after the fact. People who paid $500 for a $100 lower or $2/round for 5.56 will regret it.

    1. avatar Joke & Dagger says:

      You are making one big assumption: that this is a bubble. Or is this just a step on the way up. Not everybody is buying as an investment. A lot of people are getting their first AR. Why would they sell later. Don’t hate the player, hate the leftists, which a lot of you here voted for.

      1. avatar pat says:

        Yup. Libtards.

    2. avatar TacticalDad says:

      Take that $2 5.56 ammo to Thunder Ranch and convert to invaluable training. (or choose your training program of choice)

      Otherwise stare at it with regret every time you open your safe.

  11. avatar Too close to chicago says:

    If I hear the words high capacity ammunition ‘clips’ again I am going to puke.

  12. avatar Bob says:

    I know I keep saying this, but “price gouging” is a misnomer and is actually a good thing, pick your video.

    There would be less scarcity if sellers weren’t so afraid of being demonized by the misunderstanding of the price mechanism.

    I’ve run out and bought stuff that was still pre-Newtown priced I didn’t need simply because I was afraid of it getting banned. I also was prevented from buying stuff that I didn’t need because the price was raised due to lack of supply. That simple act of my not buying gave someone who really needed it the opportunity to buy it.

    That guy didn’t like the price, but he liked being able to buy it otherwise he wouldn’t have bought it. He would rather pay the high price than not have it at all.

    I think there some small LGS’s that have shot themselves in the foot by not “price gouging” because now they have much less inventory to sell with no opportunity to restock which means they have a period of months where they may have significantly lower revenues.

    Had they raised prices to market-bearing levels, they could have raised money to get them by the months ahead.

  13. avatar Marlin says:

    I seem to remember that when I was building my AR, I paid about $210 for my bushmaster lower, I think the colt lower was around $300, Doublestar around $90. This was in late 2008, if people want Para – USA on the side instead of a horse or a snake or a buck then people will pay for it.

  14. avatar Aharon says:

    Chris, that was a good metaphor to bring clarity to what is going in today’s AR marketplace. The Tulip Bubble craze is a great story about human nature. Farmers mortgaged their entire farm investing in tulips and lost it all. We saw the bubble craze hope and greed played out again in the artificially created tech bubble that burst in late ’99 and in the housing bubble that burst more recently.

    Glimmer and Blamo’s comments above hit the nail on the head about the potential AWB and bubble prices. Bob provided good insights about the next several months potential for lgs to experience lower revenue and why they should have maximized prices to have additional revenues to get through what might be dry times ahead.

    I wonder if the lack of .223 ammo will slow down the enthusiasm for buying ARs?

  15. avatar Lance says:

    Shows the idiocy of the prices and people who are dumb enough to buy them at those prices. Every ones effort should be helping the NRA not blowing money away at insane prices.

    1. avatar Sammy says:

      +1

      I compiled how much I have invested, not including ammunition, and have contributed an amount equal to 10% of my investment to about 5 pro 2 a organizations. If we can restore sanity, I’ll save multiples of the donations in lower product costs.

  16. avatar Johnny says:

    Thank goodness for Canada for once. We are getting .223 ammo from Norinco by the case load. No price gouging at all.

    1. avatar Sammy says:

      Ya wouldn’t care to share the web address to Norinco by any chance? They ship over the boarder to the US? What about Mexico, seems like there ain’t no gun or ammo shortage down there. Watch, these pot smugglers will start bringing guns and ammo back here. Maybe that would get Holder off the hook. LOL

  17. avatar Sammy says:

    The only things I have bought since Sandy Hook, (RIP), Is :
    1 ruger charger
    2500 rounds .22lr (average .075 per round with delivery)
    2 Bx 25 mags (22.00 ea)
    500 rounds of re manufactured m193
    and memberships to 4 additional pro 2a organizations.

    But, 100.00 for a metal Colt .223 X 30 magazine? I don’t think so. 2,100 and rising for a 6920 Colt, again negative. I’ve been stacking what I wanted since 10/10. I went from 2 .380’s to shotguns, ARs, AKs, 10/22s and an .45 XDC with ample ammo and mags for all. I saved money but still spent a lot more than guys spent in the early 2000s.

    I think things will cool down eventually. Gratefully we are up against people who don’t know what they are talking about and have to fabricate statistics to make a false argument. If we can expose this gun grab for what it really is, this might work out in our favor when all is said and done. Keep a positive attitude, it helps.

  18. avatar Random TX Guy says:

    I’ve got a low round count 6920 that I placed on the armslist. I’ve got one offer for 1600, a local. I reviewed prices on gun broker and plan to list it there. Amazing what these rifles are going for.

    I began my search for an AR right after the 08 election, suffice to say, I waited 18 months. If memory serves 6920s peeked at 1800 NIB. I have seen a few on gun broker hit 2500+. I bought mine it 2010 for 1100, wasn’t a deal at the time but a decent price.

    I plan on selling, taking my profit, and ordering a Noveseke SBR in 300BLK. Just need to find a dealer that will take my order…

  19. avatar Tulipomania says:

    The tulip history is part of the classic book: “Memoirs of extraordinary popular delusions and the madness of crowds”. A must read for anyone who thinks human nature has changed in the last few centuries

    1. avatar APBTFan says:

      Human nature has and never will change.

  20. avatar APBTFan says:

    I had an uncle call the other day that to this point has never been into guns. He heard I had a stripped lower and asked if he could buy it and pay me to build one. With the run on anything AR I told him he’s welcome to buy it but it ain’t likely I can get my hands on the rest of the shit any time soon.

    He lives in a small town in Northern AZ. I told him to go to his local Walmart, get friendly with the folks at the sporting goods counter and buy the first Mini-14 he can.

  21. avatar ST says:

    Here’s my take on this as a business major.

    The outcomes are as follows: 1) the legislation proposed by the antis dies in committee and/ or is never voted on. Prices decrease as speculators who bought ARs for a quick buck unload their stock at warp speed. Companies with record backorders will see their orders dry up as people see the political threat is reduced and go back to prioritizing their baseball card collection over their guns.Prices return to “pre-Newtown ” levels within 12 months.

    Outcome 2: Accessories and mags are regulated.
    The market will split, with 10 round ARs going for normal prices and pre ban guns commanding a premium.
    Outcome 3: the old AWB comes back, complete with grandfathering and a hard ban after a certain date. In this event the cheapest AR will be $5000 a pop , and the price will only rise with time.

    Outcome 4 : All ARs have to be registered with the NFA and all transfer and sale is outlawed. In this event the prices will crash as millions of AR owners trapped in CA,NY and other Non- NFA states are forced to unload their rifles on pain of jail time. Companies in the AR business will be fire selling everything they can before the hard ban puts them out of business.Gunbroker suffers a server meltdown as people beg for a buyer at any price : remember that someone who has $3k invested in an AR15 won’t sell it for $500 unless the alternative is law enforcement confiscation and destruction. In that situation, $500 cash is a lot better payoff then state prison.

    One caveat worth mentioning: we still have an ongoing debt crisis which can impact how much guns sell for despite what happens in DC. At the rate our currency is inflating right now, even if things turn out well Federally the list price for an AR may stabilize at $1500 by 2014 just because that’s worth what $750 was in 2009.

    1. avatar MD Matt says:

      +1
      I particularly agree with your comment about the relative values of currency. Comparing prices of goods today with those ten years ago shouldn’t be done in a vacuum. That’s doubly true since the firearms industry has been at peek production levels for years and it isn’t like we’ve had a surplus in the last five years, just a minor price correction after the 2008 election prices normalized downward
      What I think lots of bubble—break—predictors are hoping for is that all the panic buyers are non—gun people who will wake up one morning and discover that they have thousands of rounds of ammo they aren’t going to use, a couple EBRs they don’t really want or need, and then will dump all of that panic—purchased—product back on to the market. The thing is, that while there probably are a few people who bought a few mags, cases of .223, and a sport utility rifle or two as investments to flip later, all the people I’ve seen are either new gun owners or long—time owners adding to existing stock. Some of that stock might make it back on the market, especially from those who bought multiple rifles. But the majority are going to hang on to them and their ammo and shoot it or horde it.
      Besides that, the article’s comparison is entertaining but hardly realistic. Gun prices would have to be closer to say $200,000 for the historical lesson to be appropriate. $1800 or even $2500 is a lot of money, but it isn’t so much that a swipe of the plastic or a few good months discretionary funds from an upper middle class family can’t come up with the cash.

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