Gold/Silver as currency & use

[Khazik]

I have a question for those who stack Silver/Gold: When do you think Gold or Silver will take hold and be viewed & used as currency after a SHTF event occurs?

I myself have a few ounces of Silver, wish I had more but funds don't allow for that. I've chosen to invest in other precious metals such as brass & lead like most others; and invest in other hard assets like food, water, the storage & acquisition thereof (pretty broad category huh?). I understand stacking metals is a preservation of wealth and agree with that philosophy wholeheartedly. However, I know some people in the silver stacking community are mainly-if only-stacking silver and plan on bartering for their necessities. I believe it would be quite some time (atleast 6 months) before anything other than useable assets (ammo, seeds, weapons, tools, etc...) become currency, such as Silver & Gold coins. I'm aware Silver has many many uses, but those uses require various refining processes to use it in those ways (.9999 vs .999 fine silver for colloidal silver for example).

My plan is to stack the hard assets like those mentioned above before putting my excess funds into Silver. What are y'alls thoughts on the matter?

*Edit* I'm just using 6 months as a guess to people's faith being restored in any currency, considering where the dollar is headed. I believe it will take some time before people begin to trust currency at all.

 

[Dorky_D]

My thoughts are you can't eat or drink the precious metals (Gold, silver, brass or lead). That said, you cannot eat if you are dead, so perhaps brass and lead have a place higher than food to a point. I have a little of all of them, but I feel I need more of the food for now. I will work on the metals in some sort of priority later.

One point to consider on the brass and lead front. Having an ample supply of brass and lead is good, but the odds of walking out of X number of fire fights in your neighborhood, or area in a grid down situation may lessen the supply you need. I see some people that have say 10,000 rounds, I am think to myself, unless they have several shooters and a good medic, the odds of them using them in a WROL situation all are fairly slim. That has a lot of implications. Get more shooters (group), more guns, which also can imply get outta Dodge, and get a retreat with more food. It is kind of a vicious cycle if you think about it too much. Sometimes it feels like there is not enough time and money to get it all.

Just some rambling thought that occupy this mind!

 

[KittySlayer]

When do you think Gold or Silver will take hold and be viewed & used as currency after a SHTF event occurs?

I've chosen to invest in... brass & lead... other hard assets like food, water...

...stacking silver and plan on bartering for their necessities...

Well one factor to consider as you choose between hard assets and silver/gold is portability. If you have to bug out will you be able to haul all your hard assets with you or will you want to be able to carry some coins so you can acquire those goods later at a new location or along the way.

Timing wise you need to keep in mind how far away from using paper currency our society has gotten. So many people use debit/credit cards to buy everything from a 50 cent piece of candy on up. So lets assume the SHTF event results in massive power outages.

Day 1 - most folks run out of cash and after gathering up all the coins out of their couch cushions they are effectively broke.

Week 1-3(?) - merchants will sell through the goods on their shelves. Pretty quickly the good stuff will be gone as inventories are so low but the few things left the merchant will want to get rid of and will probably still take your paper currency.

Week 4 -8(?) - those with goods to sell/trade/barter are tired of people wanting to trade crap (their beanie baby collection) for valuable stuff (hard goods-shoes, tools, etc). People with hard goods know paper money will be useless soon but still have goods they would like to sell. Once again portability of value becomes important and you could probably still buy some stuff from them with silver.

Weeks 9 plus - all the goods that people want to sell are gone and they will hoard what they have left. The only thing to barter for would be services (doctor, mechanic, etc.) and some of them may be willing to take silver but would probably prefer hard goods.

During all this time the value that people place on a silver coin will fluctuate wildly and vary from transaction to transaction based on how desparate the buyer and the seller is to complete the transaction. I like your timeframe of six months for things to settle down although I really wonder if paper currency will come back into vogue.

My time table is a wild a.. guess but there will be windows of time when some silver/gold coins would be nice to have.

 

[Sailor]

Pay off your debts first.

 

[leftsock]

Everything sells for the right price.

The question really is how valuable will people consider silver to be at any particular point in time during SHTF. The longer things go and the less excess supplies there are to trade, the more silver you'll have to cough up to trade for those things.

If you're in a life or death emergency situation, how much silver should you have in your pockets? If you don't survive, it doesn't matter. Many of us consider silver as a barter item or to hedge our bets against inflation/economic collapse long before we have our emergency supplies and systems in place. You must survive first for that silver to have any value.

 

[Leadeye]

The idea behind precious metal coins is that people still count them as valuable when other things like paper money, ration coupons, etc. aren't. You need some of them for dealing on the black market when you really need something that isn't readily available, whatever that might be.

 

[drop45]

I recently started to stockpile 1/5ths of various hard liquors. In any sort of economic collapse booze can and has been traded for all sorts of goods. And once in the glass bottle it pretty much has no expiration.

 

[Justus]

I'm not sure about silver/gold bullion actually ever being used as a currency.

IMO, unless we have a cataclysmic event that wipes out a major portion of the population, fiat currency will forever be in place. When one falls, another will take it's place. There's just not enough precious metal to keep an economy going.

I think of silver/gold as a way to hold onto wealth thru a collapse until the failed currency is either re-established or replaced. From what I have researched from past collapses, people have used currency from other nations while their economy recovers. I saw that very thing happen a few years ago in New York when shops were accepting euros instead of the USD.

One thing that someone pointed out to me awhile back was that in 2001 a Glock sold for about $450.00 and silver was about $5.00 an ounce.
today a Glock is still under $500.00 yet silver is around $22.00 an ounce.

 

[BogWalker]

Silver and gold are most practical for getting out of a failing nation. Honestly, the chances of total and permanent societal collapse like many prepare for are nearly zero. Society shakes up, violence happens, things settle down in a few years. Your biggest worry is really inflation, and gold and silver are a hedge against that. If you are preparing for permanent lawlessness, buy ammo. If you are preparing for hard times, buy gold and silver.

One thing to consider is what bullion you buy. A lot of your average Joes won't recognize foreign silver and would be likely to think it was fake. I'd definitely suggest silver eagles as your stock. A bit higher per ounce, but the recognition of them definitely makes up for that. As well avoid junk silver for all but non-SHTF investing purposes. It's nice to invest with now, but post-SHTF nobody is going to put much stock in the metallurgy of your quarter.

Get your silver and use it to get a plane ticket to somewhere better while things settle down is my suggestion. Sometimes palms have to be greased, and money is the international language.

 

[KittySlayer]

Fly like an eagle

I'd definitely suggest silver eagles as your stock. A bit higher per ounce, but the recognition of them definitely makes up for that...

Gotta agree here. If you are buying silver/gold for SHTF then get what will work without question = Eagles. If you are buying it for an investment you are on the wrong discussion board for financial advice.

 

[Justus]

Gotta agree here. If you are buying silver/gold for SHTF then get what will work without question = Eagles.

This brings up a good point about how people, in general, will view silver or gold. It was mentioned above that even silver US currency will be distrusted and/or unrecognized for it's silver value, why would eagles be any different to the same group of people?

IMO, I think everyone will be skeptical. The only ones that will see it's true worth are the people with a scale and a test kit or are otherwise knowledgeable about these metals and coins before the crisis.

 

[Meyer]

I think if SHTF soon PMs will be worth something. I understand the argument about not being able to eat them. That said, there are things I have that I would barter for PMs if things went bad.

Counterfeiters are expanding their scope all the time. There are counterfeit Indian head pennies now. If things go bad in 15 years, that stuff will be everywhere and you will need to know how to test it for sure (agreeing with Justus above).

 

[PistolBob]

I'm heavily leveraged in the peanut butter and Old Fashioned Oats commodities.

 

[Street Howitzer]

Pay off your debts first.

Why? Who cares if you're in debt when the economy crashes? If things get bad the last thing I'm worried about is my mortgage. I'm as big of a Dave Ramsey fan as the next guy, but food and bullets come before getting debt free in my book. Who cares if you're house is paid for when you starve to death in a week.

 

[Justus]

Who cares if you're house is paid for when you starve to death in a week.

Our economy will take longer than a week to crash. We've been on a long slow ride down since 2007. Having some or most of your debt paid off will be a blessing when your work week is cut in half.

 

[Khazik]

Just got time to get on here. These are some nice answers and the kind of discussion I was hoping for.

I personally have 0 debt (yes I'm well aware of what accounts for as Debt), some part of it is good, some not (don't have my own place for starters) so I dont have a problem with persona debt. Like what stated by Justus, paying off debt does matter because the economy will take a while to collapse, however theres stipulations on that as well. I can see how debt matters up-to the crash in case the banks hike your rates and take your stuff while the system is still on their side; post collapse... lol no one cares, other stuff to worry about. Guess I'll keep with a balance of things as far as my preparations go, maybe more silver as it's starting to climb up.

If it gets to the point where it's 'starve or pay your monthly mortgage', personally I'd purchase a tow-behind camper, scrap/destroy the house, and Bug-Out as far as I could go. Or squat in it until I'm forced to leave, with my preps secured in another location. Most Americans who face this reality have chosen the squat method. I'm partial to the "remodeling" method myself.

 

[Justus]

If it gets to the point where it's 'starve or pay your monthly mortgage', personally I'd scrap/destroy the house,

Why destroy the house?

 

[Khazik]

So the bank gets nothin!

 

[Libertarian01]

To All,

Throughout human history nations, societies and governments have risen and fallen.

What we are talking about preparing for is not unique. We are not special. There is no magick shield that protects us from the same problems our ancestors went through or that the Syrians are going through today.

The fact that the United States will fall is not in question. The only question is timing! One million years from now our country will not exist. That said, some form of government will probably exist presuming there is still a human species.

So what we prepare for is twofold. First, the "temporary" chaos that follows the fall. When I speak of "temporary" I mean anywhere from about one (1) year to twenty (20) years. Second, the "new" normal that follows the time of troubles. For each of these preparations are very different, at least as far as supplies goes.

For the time of chaos the need will be fulfilling basic human requirements for survival. Food, clothing, shelter, protection and so on. Heat in the winter. Clean drinking water. AKA "Rambo stuff!" This will be the time of barter and trade. I will give you a shotgun for a pig. You will offer me a jar of honey for some gasoline. I will trade a bag or two of apples for some lumber to fix my roof. Eventually, this time will pass as thing stabilize and a new normal sets in.

For the new normal that follows the chaos things will change greatly! I no longer need a shotgun, I have eight (8) of them! I no longer need .45ACP ammo, I have 3k rounds that I don't use as much. If I DO need ammo for my rifle what is it worth? How much is 9mm worth compared to .45ACP compared to 8mm Mauser compared to .30 - 06 compared to a chicken compared to whiskey compared to penicillin? People will become tired of having to think about everything AND will want life to get easier. One way it gets easier is ease of transport of trade goods. People do NOT want to haul six (6) cows to market only to have to haul eleven (11) rifles with 2,000 rounds of ammo home! That crap is heavy.

So then we come, slowly but surely, to currency. Again...

Currency has four (4) basic properties:

#1) Portability - easy to carry.
#2) Divisibility - the money can be broken down. A dollar to ten (10) dimes, or an ounce of gold to a half ounce.
#3) Durability - eventually all things wear out. A ounce of gold does not "wear" out, although it may be "worn" down. This takes a long time.
#4) Stability - In a good year when people are eating well cows & pigs will have less value than a lean year. While all currency fluctuates it is generally more stable than barter goods. If I don't need woodwork done the best carpenter in the world isn't going to be able to get stuff out of me.

While some will put forth that "you cannot eat a coin" most of the time people will trade what they have in abundance for things deemed precious. Almost all of the time we are willing to part with something that either a) we do not need; and/or b) we have an abundance of! So if someone has no extra food I don't care what you offer them they won't trade away their food, unless you are offering them more or better food for something else.

We also have to consider that the time of chaos will NOT be experienced by us! We will live our lives as they did in the 50's, 60's 70's 80s and so on and will have our normal investments to live out a quiet and peaceful retirement. How boring! Yet we must consider this option. So, how do we hedge against our preparations being for naught? Invest in something that will hold value! Precious metals as one example.

The return on the metals may not be as good as some stocks or mutual funds, but they are certainly better than most things we will buy in order to prepare. That generator we bought four (4) years ago that still runs good? Not worth as much today! The MRE's we stocked eight (8) years ago that are still good to eat? Not worth as much today! The ubber great chain saw for emergencies? Less value tomorrow than today! Firearms will probably appreciate in value, but at what rate? In the Glock example given by Justus, not much. In others maybe only with inflation. Some will appreciate a fair amount but they may require a large investment up front! We may need to pay $3k today for a firearm that will be worth $6k in seven (7) years. This represents a little better than a 10% ROI. Not bad, but not super great either.

I see precious metals as a good middle ground in preparing for SHTF, TEOTWAWKI, and RETIREMENT! It should not be the priority in any of these but neither should it be ignored entirely.

Regards,

Doug

PS - If I was not clear above, to answer the OPs direct question Silver & Gold will be used throughout, though mostly reserved for the new normal.

 

[1988-4551]

Divsersifcation count, are you caching any these hard assets at least in moderation? I carry some in my go bag....