The myth that stocking gold and other precious metals as a survival tool is perpetuated by survival blogs and message boards. Common sense shows that’s not a good idea and your hard earned money is better spent on food and gear.
1. Long Term Use
First, let’s look at history. You can study any group in the history of the world and see that gold, or any other currency, was never used until well after there was a stable and functioning society, usually with some form of government. Before that there is simply no need. People trade.
In the aftermath of any situation the most valuable commodities are going to be food, water, clothing, other things that human beings need for their immediate survival.
Invest in something you can actually use or people will actually want.
2. Prepare In Order
Some people will say: “Sure, it may take a while, but eventually precious metals will be currency”
I agree, but my question is: How long will that take? Does that mean you already have EVERYTHING you need to survive in the YEARS until then? I sure don’t.
If I made massive list of everything I wanted to prepare and it was in order of importance, precious metals would near the very bottom, somewhere around “Plans to build a printing press” and a copy John Locke’s Treatise On Government (all useful in a budding society, not so much for survival).
Common sense says you should prepare for what you will need first.
3. Cash Still Works
Let’s be honest: The most likely survival situation you will find yourself in will be regional. A massive flood, hurricane, or earthquake. What does that mean?
The rest of the world still takes cash.
I wrote about this in detail here: 7 Reason to Have Money In Your Bug Out Bag.
Level of Reason
After writing this I found out there are some other common sense survivalists out there who agree:
The Suburban Survivalist thinks along the same lines: Precious Metals Post-TEOTWAWKI; I Don’t Buy It
Scott, from Bug Out Survival, also wrote on the need for cash money on hand.
What Level?
What level of preparedness would you like to achieve before you are comfortable spending money on stocking precious metals?
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I agree. JWR is the single largest promoter of this concept, and his followers eat it up like gospel. How can so many people be so acutely aware of how the "golden horde" will behave, but be so ignorant as to the fact that most people, with their money in banks or simply living on credit, won't have gold (unlike the pre-industrial age when people just HAD gold and silver because it was still traded).
The post-collapse system will either be wildly inflated dollars (see Russia), or it will be simply barter.
The people who talk about gold and silver are the ones who see themselves as post-collapse kings among men finally taking their rightful place saying "See, I told you so…"
I tried to argue with JWR once about the fact that Gold has no inherent value. Gold is technically no different than the US Dollar – it has as much value as someone is willing to give for it in goods or services. Coconuts could be just as valuable if we had FAITH in them.
Well said, I agree completely. Even our American dollar is worth only as much as the paper its printed on without the faith that its worth something (especially with there not being any gold in the bank to back it up.
These days I feel like it's not even worth the paper it's printed on, but a few more digits on a computer in the Fed datacenter.
I agree with Josh, very well put. I don't like to argue about with other survivalist writers (at least not on this site) so I just put my opinion out there.
I would argue that does goes have an inherent value because of its scarcity, whereas coconuts are a replenishing resource. – an important distinction to make, but I take your point.
That's the only reason the dollar still has any value at all, because people believe it does.
The key to Gold is timing! When your Gold reaches extraordinary price levels and the collapse has not yet occurred, you should convert to cash and IMMEDIATELY use that cash to purchase REAL value items. Real value items would include land, Supplies, Fuel, food, ammo, weapons, medicine and autos. Only the things you really need to survive and have value to be bartered with if your needs change. After a collapse the dollar won't be worth Sh*t !
Just saying if I'm gonna store cash, it will be in Nickels, the melt value in raw metal is worth the same as the monitory value.. best of both worlds..
you might have to bury it tho
1946 – 2010 Jefferson Nickel Value (United States)
U.S. MINT SPECIFICATIONS
Denomination:$0.05
Obverse Image:Thomas Jefferson, 3rd President of the United States and author of the Declaration of Independence.
Reverse Image:1946-2004, 2006-2007: Monticello, Jefferson's mountaintop home in Virgina.
2005: Westward Journey Series including "American Bison" and "Ocean in view! O! The joy!".
Metal Composition:75% copper, 25% nickel
Total Weight:5.00 grams
Comments:The 1938 through 1942 D versions of the nickel are also made of the same composition, but generally are sold for a premium over their melt value due to rarity.
Using the latest metal prices and the specifications above, these are the numbers required to calculate melt value:
$3.0044 =copper price / pound on Jun 24, 2010.
.75 =copper %
$8.8216 =nickel price / pound on Jun 24, 2010.
.25 =nickel %
5.00 =total weight in grams
.00220462262 =pound/gram conversion factor (see note directly below)
The NYMEX uses pounds to price these metals, that means we need to multiply the metal price by .00220462262 to make the conversion to grams.
1. Calculate 75% copper value :
(3.0044 × .00220462262 × 5.00 × .75) = $0.0248381
2. Calculate 25% nickel value :
(8.8216 × .00220462262 × 5.00 × .25) = $0.0243101
3. Add the two together :
$0.0248381 + $0.0243101 = $0.0491482
Device,
I take your point, but my question is this:
If it's a regional collapse do you really want to carry around and pay for everything in nickels?
If it's a total collapse, your theory is somewhat hard to support because the only reason those nickels are worth money, both as money, and as raw metal, is because of the government system.
In total collapse there will be no market to say that copper is woth 3.xx a pound and nickel is worth 8.xx a pound, so how will it be?
Now if you are talking about as an investment opportunity that's a whole 'nother thing entirely.
I agree but…. it's all about timing.
I agree that PMs (including nickels and/or copper, btw) will not have much, if any, value if/when TEOTWAWKI gets here. If it's a really hard crash, I'd expect a large die off. In that case, PMs will be laying around for the taking. No value for a long, long time.
*However*, before that time they can act as a hedge against inflation and so I believe are a worthwhile investment. The caveat being that other basics are covered; ample food storage, firearms/ammo, BoV, other misc. gear, etc.
Let's face it; unless there is a series of miracle-like advances in energy technology, and a similar reduction of the U.S. national debt, the slow decline we are already in will continue. One likely effect will be hyper-inflation. PMs are likely to hold their value and appreciate with inflation, thus acting as a hedge. You may not make money, but are much less likely to lose it.
For example, say I buy $1,000 worth of silver now. Inflation hits. The value goes to $10,000 – but so does the price of an AR. That's an acceptable scenario.
Back to timing; the key is cashing out (PMs for X goods) ***before*** TSHTF. After that, the PMs are just pretty metal. [However, both gold and silver DO have some inherent value in electronics manufacturing; they have properties that other metals do not. After TSHTF, however, that manufacturing will be no more.]
Will we be using pre-1965 dimes for purchases post-TEOTWAWKI? Doubtful (my guess is bullets, especially .22LR). But buying gold/silver now is not about setting up to be a "king," at least for those that anticipate hyperinflation in the coming years.
Timing is everything…
Suburban,
very well put. I found your article on precious metals after I published this one. I'll go back and add a link.
I really like your point about cashing out. To me I think of gold in two different ways:
1: by survivalists who stock it for all the reasons we've mentioned
2: as an investment in the regular world.
I never tried to connect the two, but having a cash out point is a great idea. (if and when I actually have enough money to buy some gold, or gold futures).
Is this a mirror site/post, or unauthorized?
http://www.survivalarea.com/survival-gear/3-reaso…
Suburban,
It appears they just scraped it straight from my RSS feed. I'll send them a message and see if they will stop, but if not I'm not too worried about it.
Google is good at knowing the difference between scrapers and originals and at the very least the article has links back to our sites.
Thanks for the heads up.
The question is not whether gold has any real value. No money has any value beyond what a society places on it. But precious metals — especially gold — is nearly universal (across time and locale) in its perceived value. That is the difference.
For most of the 20th century the US Dollar has been the world's reserve currency. But that is not the case anymore, with major world economies like Russia and China now buying gold instead of US Debt. That should tell you something about gold and perceived value.
Cash is king, as they say. And you should always have a supply of cash on hand. But don't overlook a slow-decline scenario. When economies are booming, gold is a bad investment. When economies are busting, gold is an incredible investment. When it all goes to hell, we're back to bartering.
Good explanation. Might point with the article was just to point out that gold as a bartering tool in the aftermath of something is a silly concept.
I definitely won't discount it as an investment opportunity.
I think that gold, which has gotten way to expensive for the normal person, is over-rated. I feel silver may be more intelligent to buy. Silver coinage is much easier to use and will probably maintain its value. Ergo, if I was to buy anything, and my finances don't seem to indicate that will happen soon, I would buy sliver coinage. I agree that batering would probably be the new form of getting what we need.
Jeanne
I totally agree with this. Silver is a often-overlooked investment vehicle. Plus, if gold really is being used how are you going to partition something that costs $2,500 an ounce? Silver is a much better trading currency, pegged to gold of course.
Hello All, I am going to be the decenter here and state that the author is confusing a medium of exchange (fiat Dollars) with medium of wealth (Gold/ Silver).
Let me explain here…
A medium of exchange is something that has no inherent intrinsic value and can be created at will. It must be locally accepted to have value, due to Government proclamation or mutual confidence. Military Script or fiat currencies are a good example.
A medium of wealth is something that has intrinsic value due to it's inherent properties. It must exist in limited quantities and it cannot be created at will. It must also be valued beyond the local society, in case that society ceases to exist. Gold and Silver Coins have been a good example throughout history.
Right now, a bag of pre-64 (90% Silver) US coins with a face value of $1000 are selling for $13,127.40 (www.apmex.com). The $1000 of coins still exist and the $1000 of 1964 paper Dollars still exist. Why will one buy 10 times more than the other? It is obvious to anyone with open eyes, Silver coins are a store of wealth and US Dollars are a simple medium of exchange.
That is the issue that the author is missing.
I agree that cash is king, but why not store ones wealth in gold and silver and then trade that in for cash? When a fall takes place, cash will still be used as the medium of exchange, but those who have gold and silver will be able to maintain their medium of wealth.
This is why it is important to maintain a certain amount your assets in gold and silver because it will maintain your medium of wealth, which in the end that is what is important, not the fiat paper that we call dollars.
Ray
Survival 4 Christians
Ray,
I take your point but I think you misunderstand my position.
I understand how the value of gold and silver coinage works and why it is worth more.
My point is this: Right now your nickels that are worth $13k are only worth $13k because that is what the market says they are worth.
Sure they have value in the long term because nobody is making more nickel.
BUT, in a total collapse situation, you won't be able to buy anything with a bag full of nickels, because it will be useless to other people.
So in effect the $1000 dollars of paper money or the $13k of metal money won't buy anything at all.
If the entire financial centers have shut down, people aren't going to care what your nickel is "worth" they only care what you can give them to survive. You sure won't be able to buy $13,000 dollars worth of food, water, and gear, with that bag of nickels.
I'm simply saying that is non-total collapse your point is true and a good investment for some people, but total collapse it's not.
Exactly,
If your out backpacking cross-country, of course it makes more sense to bring a fistful of cash rather than a sack of pm, but what good is hording dollars going to do once we've quantitatively eased it into nothing. Protect your health and well-being with store-able food, protect your wealth with pm. In situations of economic collapse, people trade with whatever they see holds value and gold and silver are always high on that list. There are times in our history when scrip and fiat currency lost so much "faith" that folks refused to trade with anything but gold or silver.
Bingo.
Hi ya Lucas,
First, I love your site and I enjoy your articles greatly. I say that because I really respect what you are doing here.
I do want to address a total collapse. Personally I do not see this taking place in today's world. Sure there can be nukes, pandemic, terrorism. But the odds of these mass events taking place are not totally realistic. Now I am not saying that they could not happen, they could, but the odds of it happening, I just don't see it based on historical evidence.
But looking at a complete economic disaster taking place here in the US is very feasible. In talking about an economic disaster, there has yet to be one solid example of the world going to hell like we read in the popular book ny J.Rawles – Patriots, which is a scenario that a lot of preppers look to.
Thing is man will always repeat his mistakes, history has proved that over and over again.
Example – Zimbabwe major economic fall, in fact today a dozen eggs cost 3.2 Billon ZDollars. Crime is up, drugs up, murder up, etc etc. Mad Max / I am legend? No.
Looking at the economic fall of Argentina in 2001, same thing. Germany, 1930's, Bolivia, Japan, Iraq, ect… no mad max / I am legend scenario.
The world and the people went on with their lives, bought, sold, traded, worked, went to school, lived and died.
How people did survive these economic disasters was by preparing and having their wealth maintained in tangible assets.
No matter what barter, trade, purchasing and selling will go on no matter what the situation is. The fact that 90% of the people out there are not prepared will make this a fact. When Argentina fell, one of the first things that popped up was "we buy gold" dealers all over. Second was black / gray markets where you could buy, sell and trade. People need supplies no matter what, 90% of the population will not form into mass gangs raping and pillaging the land. There will be small bands of thugs yes, but during an economic meltdown all hell will not break lose as Hollywood has predicted because history has shown otherwise and history has always proven to be correct.
The people will use cash and tangible assets no matter what the situation is because 90% of the people have no clue and are not prepared to meet these things head on. It is the old law of supply and demand… it always wins out.
This is my two cents, agree or disagree, but we will find out what happens in the near future with the direction this country is going.
That is why I am a prepper and have been doing so for a while now.
Keep up the good work, I appreciate what you are doing here.
Ray
Texas
I like your comment, Ray.
I think the “Golden Horde” concept is ridiculous and that most of the people will do the stupid thing and stay in population centers where they feel comfortable expecting to be taken care of by the government. It is a crisis and those who are not already independent will maintain their dependence until they starve. They won’t even consider leaving.
Meanwhile, smaller communities like mine will do what they did during the great wars – they will can together, raise crops together, and make do. Farming communities will adapt to local needs rather than subsidy prices and mass production. Butchers and bakers will reemerge.
Some sort of local bank and standard market dollar will emerge. They will protect their borders and help wanderers.
Thank God for small town America.
Has anyone one thought about INCOME TAXES and TAXES in general? All governements tax, even after a TEOTWAWKI the U.S. Government has plans in place to survive an all out nuclear war, and start taxing the people within two weeks after the bombs stop falling. If you try and exchange a bit of Gold for goods andor services you can bet the goverment in power will know about it very shortly, and they will make sure they have not missed out on any other purchases you have made or will make. This decreases the value of gold and silver used as investment material. You will need a lot more of it than you thought after the govenment takes their share. Just how much the taxes will be afterwards is anyones guess, but I will bet its going to be through the roof like 80% at least. You got it, the government needs it, so guess what happens next. So I ask is it worth it in the long run to have a bunch of gold or silver?
Physical assets and skills are much harder to tax andor take away, and I do not have enough of either to spend my money on gathering gold and silver which are pretty things to look at but hard to eat.
I totally agree with you Lucas and it seems like our opinion is the minority in the "survival community". I often see many posts in survival/preparedness forums promoting precious metals to be bougght and stored in case of TSHTF. I see precious metals as a possible investment – possibly a hedge against inflation – but not a survival supply. After TSHTF – true survival supplies like food, water purification, tools, first aid, and firearms will be needed – not a hunk of metal.____Rourke
I also think of using PMs as a generational investment/gift for my family. Post collapse I will not have a 401K or nice life insurance policy to leave to my survivors. It has been pointed out that it would likely be quite a while before gold and silver were used as currency. This is why I have some to leave to my children, their children etc.
a must in your preparedness will be barter items. one item that will be worth it’s weight in gold will be tobacco! the roll your own type is very cheap,light and ppl will give up their 1rst born for a smoke. just something to think about..
Tobacco doesn't keep very well.
I like the idea of beer and tobacco for bartering. Much more useful than some shiny metal. And besides, if things don't become some post-apocalyptic movie, you just don't have to go to Costco for a while.
Have to say, spoken (ok, written) like someone who doesn't own any.
I don't disagree that food, water, cash, etc. won't be good to have, but why not ALSO have some PMs?
What if the only guy selling cheeseburgers/gas/water will only accept bullion (gold, silver or copper)? He lost his faith in the currency system. He already HAS food/fuel/water and I don't think you're gonna want to start bartering away your ammo. He may choose to accept PM because he has someone upstream he knows that he can trade it to for more hamburger patties.
If you're going to be prepared, then why eliminate something so easy?
Silver is probably a better choice as it's value TENDS to be far less than gold's, and thus you can have smaller "denominations." Downside is it takes (currently roughly about) 60x the weight of silver to have the same dollar value as gold, so it would be reasonable to have both. Personally, I don't bother with anything but .9999 for either gold or silver bars and coins. YMMV. I also think it's not unreasonable to have some 14-18k+ gold and 925 silver jewelry for trade/barter. Whether or not it's your style doesn't matter. You would only need to wear it when you grab your BOB.
The comments above about PMs being a store of wealth is on the right track. One needs only to look at the infamous Weimar Germany collapse, or many other lesser known currency collapses to know that if you have wealth to preserve and move, paper is not the way to go about it.
When it takes a billion US Dollars to buy a cheeseburger, don't expect the Canadians to adhere to today's exchange rates. Gold, on the other hand, will still have value.
Sooner or later after TSHTF you're going to want to re-establish your place in society. Wealth preservation will sure beat being broke.
Im not sure If I can say post crash, but I can say valuable metals are certainly a decent investment.
I have, or someone I know *wink* has a safe with bouillon coins(maple leaf, panda, britannica, koala and eagles), making up 50 ounces of platinum, 50 of gold, with a cumulative face value of 7500 Dollars give or take, but an actual intrinsic value of 130,000 dollars. If only it wasnt a crime to melt them down…
Many believe we are in the early stages of a financial collapse allready, not so sure myself. But a collapse involving the US dollar could cascade around the world. The historical examples of financial collapse mostly pertain to single countries. I can see several possibilities of collapse where gold and silver gain acceptance as a medium of exchange early in the “troubles” and retain that acceptance mostly, if unevenly. Other dire possibilities exist (as noted here) where it may be decades before metals are commonly traded again. Either way, after a collapse, gold and silver coins are more likely to still have value, than stocks, bonds, or even bank accounts. So if you see a collapse coming, and are cashing out of paper assets, buying some silver coins may make sense for you. If you do that, putting a few in your bug out bag with the roll of regular quarters and the $5 bills can’t hurt much and might help alot.
Yes, it's good to be prepared for anything, in this day and age; have the provisions to ride out the storm. However, PM are generally seen as a bad investment to those who don't have or can't afford it.
With an ounce of Silver going for around 20 bucks, and single gram bars in the few dollars range, it's hard to imagine that someone willing to be prepared couldn't find a way to acquire at least a minimal amount.
Next in line is poor-man's-silver (if silver is poor-man's-gold), copper.
Probably safe to assume that where you can "spend" gold or silver, they will also accept copper.
I think that PMs will hold intrinsic value in the long run. Any metal(lead, copper, brass steel) will be of great importance post TEOTWAWKI. The idea of storing it for future generations is great, but it depends on surviving that long first. As previously stated, use of gold for bartering will bring unwanted attention, not just govt but raiders, etc. A box of 30-06 will feed a mans family for a year, I think that will be the primary concern of the unprepared. My own hope is to have little if any contact outside my retreat for at least a year. After that ,population density should have been reduced enough to make disease less of an issue. Why barter with someone who is going to give you the plague?
I think American’s in general don’t know what to do with gold/silver with respect to survival. Mostly because we are such a young nation. Face it many (most?) other nations have histories of 800, 900, 2000 years, they know what is money and what is not. Take vietnam, hundreds of people fled during the war years into safer areas bribing their safe passage with gold foil (a common way to own gold there) in clothing. Same thing with refugees during WWII. Having said that Gold/Silver SHOULD be at the bottom of your priority list, it is something bought AFTER you have your preps done. Perhaps the best way to view gold/silver is seed money to restart your life after things have stabilized.
Silver is a good all around investment both for bartering and it has actual uses other than just looking pretty. The Romans would toss silver coins into their cisterns because they understood it keeps the water clean. Just look up all the uses silver has compared to gold. Also non-hybrid seeds for crops will be worth more than anything except clean water. Its good to even have a victory garden to help get you used to small farming techniques and it also helps offset monthly food costs.
Betting on the total collapse of society is putting all your eggs into one basket. It is more likely that our current society will partially collapse in varying degrees in different locations. In any case, the us dollar is not going to be worth anything as long as the government still has printing presses.
Along with your bunker full of cooking oil and ammunition it would be a good idea to have some Pesos and some Canadian dollars on hand in case you need to cross the border. When that time comes, no quantity of US dollars will pay your way.
I'm pretty sure you can buy anti-venom, but it's really expensive (since it's so hard to produce) and expires every year or so. This would probably be your best bet, but I read somewhere it needs to be administered correctly (which is difficult?) or it could be worse for you than the bite itself.
Also, even though I've read a lot about these being ineffective, I'm with Lucas on getting rid of that extra 2% (98% poison is better than 100% I suppose).
I've also read interesting stuff on how hitting yourself with a stun-gun at the point of contact will help save you.
Also, when hiking (unless hunting), try to take heavy steps as it will alert snakes you're heading their way. Apparently a lot of bites come from people stepping on a snake they didn't notice. I mean, if I was a rattlesnake and I felt something huge coming, I would starting making some noise.
I suppose the best thing to do would be splurge on the anti-venom and learn how to use it correctly. There's no 2nd chance with fatal bites.
Very good point. The powers that be don't want you to be able to have gold so keep it to yourself.
Something I haven't seen addressed yet that I think is important. And that is that a disconnect between hard coin and paper currencey is very likely to occur, just as it did in Zimbabwe.
I'm thinking that if, or when, there is an economic collapse, the older silver coins will be much better tool to barter than a mule load of barter materials, especially if the one you're dealing with doesn't want what you have but you need what he has. I can carry a pocket or coin purse full of change and be able to dicker on the spot rather than have to go to my stash and gather up my barter and return possibly to find out that the man has sold what I want or has gone home for the day. Otherwise I have to negotiate, go to my stash, with the chance of being followed and robbed, gather my barter and return safely to finish the deal. The second way is more time consuming and dangerous than the first and I am believing that people will take an easier way out than a strictly good only barter.
Oh, and those coins won't be necessarily be counted as true currency but as a new currency that is valued by weight of the metals in the coin instead of a rapidly changing dollar system.
As for gold, unless you're dealing with gold dust, I tend to think that that will only be good for major purchases until there is some sort of honest banking system restored where I can go to exchange it for an equivalent amount of other more exchangeable coin.
And paper, in a hyperinflationary scenario, will have to be spent almost immediately upon receipt so that you don't lose much of it's value before it's value decreases.
And I don't see a deflationary economy setting in overall. With the needs of all the people taken into account and the likelihood of fewer goods, the pressure will be to increase rather than decrease their cost.
I have to say you have all given me a new outlook on purchasing gold and silver as part of a prepping strategy. I was focused more on silver for its smaller denominations. I still think it may come in handy in a SHTF situation if and when paper money becomes worthless and i think gold can be useful for overall wealth protection. These probably being more useful in a country-wide/worldwide SHTF situation. I won't try to spend silver coins at the grocery store if a disaster would be cleared up in a short period of time relatively speaking. I just believe like OldCharlie that there would be a disconnect between paper currency and precious metals once paper money becomes worthless. As long as people generally believe at some point in the future things will be changed. Of course after reading all the comments, i also see that nothing will beat usable goods in that situation. Things people need right then and there could easily be worth more than silver or gold.
If you are just hoping that the dollar is going to be worth anything after the coming economic crash you sadly mistakened. I have a stash of of old silver (got from my parents after they passed) and a small stash of new silver. Gold has gone thru the roof.
Greenbacks will be good only for wiping your butt and starting fires.
Lots of smart people here. Let me throw another angle into the mix.
I have a friend who escaped Cambodia when Pol Pot tried to turn the whole country into a gulag. He says, "Gold talks." When everything and everyone was corrupt and the currency was worth nothing, gold still at least had enough perceived value to bribe guys with guns to look the other way.
Now, I'm not advocating for gold. I don't have any and I'm not likely to go buy some. I buy food and squirrel it away. My Cambodian friend would have given anything for a bag of jerky when he was running through the jungle, trying to get to the border. Still, something tells me a few trinkets might be good to have…
I consider gold as the last tier of a complete survival strategy. It's in the BOB along with the passports and birth certificates for the reason your friend states. In any realistic scenario, law enforcement and bureaucrats will still be there, or hastily reinstated. Remnants of the good ole days will remain, for those that can afford them. Whether it's surgery, plane/train/ship tickets, travel passes, ration cards, tolls, taxes, or other (like bribes), gold is gurananteed to be accepted as payment if anything is.
Here's my view on precious metal – It depends on why we are in a survival situation as to whether gold/silver will be valuable.
Hurricane or Earthquake – probably not.
But if our nation collapses because of massive inflation, failure to pay down the national debt, and we can not make the interest payments on the national debt. YES, precious metals will probably be valuable. In this situation the stock market may plummet before you can cash out and…cash may be worthless.
I agree that you need to have preparations made for food, shelter, water, arms, etc. etc. But where do you diversify your investments if you don't have great confidence in the economy, the dollar or the stock market?
The Poo may hit the fan in two, ten or 100 years from now, no one knows when it will happen. But if you diversify your investments now and hold some precious metals at home in a safe (not gold mining stock or gold in some repository half way across the nation) you will have something of value when the dust settles.
I am 49 years old and feel like I have worked a life time to save for retirement. If I have all my assets in cash and the stock market…I could lose it all.
I paid cash for a nice little farm (cash so no one can repossess it, so long as I pay the tax) and plan to start stockpiling a little precious metals. Cash and a brokerage statement could be worthless when bread is $9 a loaf and gasoline can not be purchased or is $50 a gallon.
Gold is too expensive for me now . I buy the one ounce silver eagles here and there but like mentioned above , coins are weighty . Silver to me seems the most practical for using as money if currency is not accepted , most folks will take a silver dollar . The silver eagles I like because it states 1oz pure silver . 1920′s -30′s Liberty head dollars are cheaper if you want more of them . Silver is silver for basic stuff . Liberty heads are not pure silver but fairly close . Small amount of other metal was used in order to make them last in everyday circulation . Paper is easier to deal with on every level .
Any country that uses Zinc for coins ……..is going downhill or is already in the toilet !!!!!! Our copper flashed Zinc penny for example .
I believe that silver may be worth the investment to put up for future situations, but I believe investing in gold at today's prices would be a fool's folly. That being said I do agree with the people on here who say that you at least need some of it put up for the rebuilding point after the total collapse. Now as to whether or not I believe JWR is correct with his idea of the "golden horde", well I just remember the idiots rioting and burning entire city blocks because of a jury verdict… Do I believe my fellow man dumb enough to try and ransack somebody else's food supply if they cannot afford to buy it due to the collapse? Yes….Society is fragile now, they run out and buy up everything in the grocery store if a natural disaster is headed their way or if they believe they are going to be snowed in, so there is no telling what the idiots would do if a major disaster fell upon us….
The best argument for PM that i have ever heard was basically this:
100 years ago, a $20 gold piece (worth $20) would buy you a really good suit. So would $20 in cash.
Fast forward to now – that same $20 gold piece will still buy you a really good suit, it's just that the suit costs around $1400. That same $20 in cash you had 100 years ago, is still only worth $20 today.
Face value, yes, but actually, it's not worth the same $20. 100 years ago, the US Dollar was backed by gold. Now it is backed by lies, I mean, promises.
100 years ago, you could by an ounce of gold, or a really good suit. Today, you can by 0.0125 ounces of gold (1/80) or a 3 pack of socks.
Historically, when paper currencies or debased metal currencies have been used as a means of extending bankrupt government it is precious metals that preserve wealth the best because they become the most desirable asset to hold.
In a total collapse scenario where there is literally not enough food or fuel to survive you would still have people what would have more food and fuel than they could use. They can't be paid in additional food or fuel so they must accept something that is recognized globally as a store of wealth. Hint, it wont be the dollar.
Invest in : AMMUNITION
Good article, agree with everything you have all have to say. However, be prepared for anything right? I say keep a minimal amount of precious metals around just in case. Even if SHTF people are still people and some will still value gold and silver, especially if there is a possibility of things returning to somewhat of a normal society. Gold has always been valued.
COMPLETELY INCORRECT PREMISE
PMs have had value for 1000s of years and will long after fiat currency has been used as kindling.
T least a small amount is an essential addition to any plan.
TAXES…..
THEY WILL TAKE YOUR 401K TO SAVE SOCIAL SECURITY.
They will TAX YOUR LAND.
Payroll taxes, national sales taxes, you name it and they will tax it.
Agreed on the article that supplies are more important but even people who promote silver like JWR, recommend that is the last thing you buy in you preperations. Going forward there will be a high demand for things that cannot be taxed and large amounts of underground economic activity will occur.
Plain and simple unless there is a stock exchange to set the price of an item it's value is only in it's direct use. Precious metals have none unless you're making electronic devices that require serious infrastructure. Gold's value originated with currency, not the other way around. Gold was selected for currency purely because it's difficult to counterfeit given it's rarity. If the infrastructure that ensures the value of official currency goes, so does that of gold.
The obsession with gold is the classic idea that you can take your money with you. We've pretty well proven it's not going with you in death so people have switched to the closest analog, a TEOTWAWKI. If there is a TEOTWAWKI and you are rich, you're just as fucked as the rest of us. Get over it.
What about in a situation where massive inflation takes place and money becomes valueless? Precious metals are always going to be precious and other countries around the world could easily still be functioning and have a demand for those goods. In that scenario it seems a good idea to have some of your money in gold, silver, nickel, etc. Definitely if there was a complete breakdown of our society then water and food are worth infinitely more than gold.
What about in a situation where you have to bug out? Say things get so bad in your area that you have to get out of dodge and the situation makes it so that you can't load up your bug out vehicle and drive out. Or say you're bug out vehicle breaks down and you're forced to leave it behind with all of your rations. You're forced to walk and can take only what you can carry. How much of that ten years of food & water storage/ammo & guns stash are you going to carry with all of your other survival gear? You're going to need something of tangible value to rebuild somewhere else and having a stash of gold/silver will most likely make that a distinct possibility.
I'm planning for ANY situation that may occur and if I have to bail out on my stash and leave it behind I want to make sure I have something of value to exchange for items I may need that is/are portable. I can easily throw my silver stash in my BOB. ..
Keep stack'n… hold strong & go long…
PitBull Pappa
Besides that, how do you determine how many eggs is worth a pound of meat? Or how many tomatoes/potatoes is worth a chicken? Once again… bartering items is only as good as to what each party needs. This is why DIVERSIFICATION is key… don't put all of your eggs into one basket… put so much into everything and be truely prepared.
Just my $.02 worth… and yes… I have a stash of REAL copper pennies too…;)
Best of luck to all…
Keep stack'n… hold strong & go long…
PitBull Pappa
Yes, in a complete long-term collapse of society, silver and gold will not be valued highly. Is this really news?
The real question should be how you should prepare based on the odds. There have been numerous cases of hyperinflation and currency devaluation in the past 100 years. To date, there have been zero complete collapses of society. Therefore, the chances of hyperinflation in the coming years in the USA and Europe is a great deal more likely than a complete collapse of society. In instances of hyperinflation gold and silver have meant economic survival for all holders. Even in a worst case scenario, it's much more likely that the USA will gradually slide into a collapse. I believe during that slide gold and silver will be quite valuable as sellers still have good to sell and law and order is still mostly present.
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Not gonna lie guys, I think we are making a massive assumption here.
1) that the world will go through a massive great depression that will last decades. It is a possibility, so is the fact that it only lasts a few years.
2) Community insulation! If you can get a local currency to start circulating "and now is not a bad time" then you end up largely missing the bulk of the collapse. In fact, you may very well see your local community leading the charge for recovery. This only works if you HAVE PM's.
3) The people who think about this type of stuff are most likely going to LIVE through this event. Why not have a jump start on the system and have it ready?
4) If you have the capital to make the investment, I say go for it. If you don't most likely there are other things you can invest in such as food. Bullets will not be the currency of the future. Trust me, they tried that in Argentina in the 2001 collapse and that didn't do much for people.
Please don't advise people to not buy gold or silver. Advise them to priorities and get food, water and a gun and that type of stuff first. But PM's are a must if you want to end the perpetual nightmare that fiat brings. Do you want to do this survival stuff till your in your late 50's after all???
This is the story I have always related to folks who have insisted that I MUST BUY GOLD TO SURVIVE.
Back in the late 70's – early 80's, I had a fellow employee who bought gold Krugerrands. He bragged about how he spent a percentage of his monthly income on the Krugerrands, he crowed every time the price went up. He kept pressuring me to buy them, too "so we can both be rich in the coming collapse". I laughed uproariously. "Ken, you have Krugerrands. I have chickens. I can eat the eggs the chickens produce, or I can hatch the eggs and eat the chickens. You are hungry and want to eat. You come to me and want to buy a chicken. Well, I can'tmake change for a Krugerrand, and it is YOU who needs to eat, not I. I need my chickens more than I need Krugerrands. How much do you think one chicken – or even one egg – is going to cost you?"
This is the simplest law of supply and demand – the owner of the supply can charge what ever the person or people demnding it will pay… or choose not to sell at all.
Choose to own a readily available and easily replaceable supply – or choose to buy from those who do.
BTW, guess how this conversation went in 1986 – "So, Ken, how'd those Krugerrands work out for you?"
CLICK.
If you think that the price of precious metals isn't being hyperinflated and manipulated, and can never crash, I would refer you to history. Like Old Mr Potter in "It's a Wonderful Life" there are people who are manipulating the markets and taking advantage of every person who eagerly buys into any theory. It is they who will profit – not you.
My brother n law & sister have a few ounces of gold n their kit and they have yet to give me a satisfactory reason why. I tell em that n a total collapse situation I DON’T WANT YOUR FRIGGIN GOLD! But I’ll trade you a thousand rounds of .22 for that working car battery…..
Interesting discussion. Just a thought along the way.
When (not if) we experience a financial melt down in the USA, it will be a financial meltdown world wide. Inflation is a surety. The paper money you have will last only a short period of time, afterwhich, PM and barter will be used for common exchange. I went through hurricane Ike in Houston. I was prepared well in advance. ALL store shelves were empty before it hit. The day following, I drove around my area of town and the few gas stations that had a generator to power the pumps, had lines over a mile long waiting to try and get gas. Even with power to the pumps and lights, their cash registers did not work as they were linked to the internet. ALL sales were CASH or silver coins only with NO change. Banks were closed and ATMS didn't work. People were trying to sell their gold rings, watches, etc for cash to buy gas and getting about 10-20% of it's value from the few people who had cash. Point is, that PM ( especially silver ) may very well have a place in commerce. Not the 1st item on your list, but it definately has a place.
Great piece of writing, well crafted I must say.
Some people old enough to know have told me that game largely disappeared during the Depression. Then again, I know a guy who grew up near the ocean in Florida who says they always had plenty to eat: fish, shellfish, crabs, etc.
If there is a total collapse, lifespans will drop back to what they were a hundred years ago for those who survive the first few months: about 49.
There may be a barter economy for a while, but it won’t last long. Then those with PM’s will thrive.
Excellent point. Not sure I would have more cash than necessary to get through the intial stages until everyone realizes the dollar is no longer acceptable because there is no government to back its value with contiunal debt.
JWR advocates Beans,Bullets and bandaids first!!But if you are going to invest the last time I check gold and silver have never been worth Zero!EVER!!! There's always a first time I guess!
Don't melt them down! As they sit, they have a known value. Anyone who doesn't have the ability to test their content is a lot more likely to accept the coin they trust than the unknown bar that may, or may not be pure.
Yes, but who is to say what that "right time" is? You say to wait until the critical moment. But what if your timing is off? What if you "cash in" and the collapse doesn't happen as expected? What if you decide to wait until the peak moment but you wait too late and the collapse happens and your stuck with your gold and silver? I know the value of the dollar is essentially worthless these days, but I say to take advantage of the "blind faith" folks have in the dollar to invest in goods that you can use. And don't just stock up on food. Stock up on traps to catch prey and heirloom seeds that can reproduce (hybrids don't). You will want to have something for when the canned goods run out…lol.
So if you had 100 nickels- you would have 5$ metal value, fifty dollars face value-right?
The real question is how many nickels do you need to put down the barrel of your shotgun to kill dinner when you run out of ammo. I imagine it would get somewhat tiresome lugging your fortune in coins around also that coupled with the fact you are going to sound like a belly dancer every time you move. I say skip the coins and pass the ammo.
100 * $0.05 = $5.00 face value.
Flint, pack a calculator in your BOB.
Device442, you may have the right idea theoretically, but you have to factor in the energy required to melt down the nickels and separate them into their separate components. Similar to why PM coins/bars sell for a higher price than the current spot price. The production costs.
So, if you take the expense of melting your nickels and separating out the copper, then I might be willing to make the trade at the going copper rate. But, if you expect me to do the work, then I will have to offer you a discounted price.
Refined metals will sell for a higher price than raw ore. Similar idea here.
In mitigating all circumstances that could impact your world, owning PMs is not a bad idea. There is only so much supplies that can be stored. So converting that store of wealth at some point for land etc would be a key to long term survival. Keeping some cash is a good idea, but long term with the printing press (BTW, printing presses will be banned, no sense letting Ben Bernake have a tool to print dollars afterwards) going continually I would not take your worthless US Dollar for a bag of rice, soap, bullets etc, but I would consider silver as a medium of exchange. You have to have something when you come out on the other side, or mitigate that the crisis will be short lived and you can be prepared to participate in the rebuild.
Completely ignoring PM as a apart of your survival list is like forgeting to make a key for your storage locker. it willopen up opportunities for bartering during and commerce afterwards. Duly wake up and think outside of your paradigm.
In mitigating all circumstances that could impact your world, owning PMs is not a bad idea. There is only so much supplies that can be stored. So converting that store of wealth at some point for land etc would be a key to long term survival. Keeping some cash is a good idea, but long term with the printing press (BTW, printing presses will be banned, no sense letting Ben Bernake have a tool to print dollars afterwards) going continually I would not take your worthless US Dollar for a bag of rice, soap, bullets etc, but I would consider silver as a medium of exchange. You have to have something when you come out on the other side, or mitigate that the crisis will be short lived and you can be prepared to participate in the rebuild.
Completely ignoring PM as a apart of your survival list is like forgeting to make a key for your storage locker. it willopen up opportunities for bartering during a collapse and commerce afterwards. Duly wake up and think outside of your paradigm.
Holding a worless piece of paper in a collapsed world might as well be used for wiping your backside.
Mitigate the risks, plan for as many varables as possible, and moderate all plans
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