Firearms Are The Hot New Investment, Does That Scare You?

Americans in gun-loving states have always bought and sold their heat with gusto. In a downturn however, arms small and large are being traded like barrels of light sweet crude on the floor of a boiling hot futures market.

Forget stocks. Forget high-yield bonds. Forget modern art. Firearms are the new hot item in the investment portfolios of recession-pinched Americans. Gun sales have seen a 27 percent uptick in the first three months of 2009 compared to the same period last year. This figure is reflected by the sharp spike in FBI criminal background checks.

Many in the market are buying guns as investment items that can be resold at a significant profit. Fueling the rapid appreciation rate is federal legislation rumored to be on Obama’s desk that would re-establish the assault weapons ban which expired in 2004.

Judy Voss vice president of Rock Island Auction Company in Moline, Illinois, said there has been a “tremendous increase in value” on collectible arms at a number of shows she has visited recently. She noted more conversation about potential legislation that could curtail sales as well. “You see a lot of emails being passed throughout the industry,” she said. “Any collector is very concerned about it.”

Though Mexican President Felipe Calderon supports re-instating an assault weapons ban in the U.S. because it would stem the flow of weapons south across the border, administration officials said the neither the president nor Congress will be pushing a domestic ban anytime soon. Alternatively, Obama is expected to ratify an OAS convention agasint illicit arms trafficking.