Why Precious metals and gems?

[warthog]

I don't prep more than to be able to get through a natural disaster. Beyond this I put myself in the Lord's capable hands.

I want to know something though, why precious metals and gems? You can't eat them and they won't be worth much if the economy collapses. I know if a guy/gal came to barter for a gun or whatever and had gold bars I would tell them to get something good to eat or something that helps me cook or solar panels etc.

Gold/Silver would not fit this bill for me. All it is at this point is pretty. My money is better spent on food storage etc IMO so help me on this one.

 

[Mister K]

My take on it is that Gold, silver and gems are for people that have wealth and want to protect it if (when) the economy collapses. Much like wealthy southerners during the Civil War buried their silverware before the northerners came. They could dig it up later after all of their other possessions were gone. A person of wealth should probably use their resources to first acquire the necessities to deal with a collapse or disaster: food, water, weapons etc. and then acquire the shiny things with what is left over. Gold / gems are more for re-establishing your wealth when things come back to whatever normal might be.

I do not have wealth so I am more concerned with the "beans and bullets." However, it would not a bad idea to have small amounts of precious metals for trade and barter, such as pre-64 silver coins.

 

[BehindBlueI's]

It all depends on what you're prepping for. A quick glance at history says if you want to be prepared to pay bribes to flee concentration camps, political re-education purges, etc. than gold, gems, and hard currency are very valuable to have on hand. If you're preparing for economic collapse such as the Great Depression, you're better off with canned beans and lamp oil.

Oddly enough, I'm reading about the history of gold right now. Gold: The Race for the World's Most Seductive Metal: Matthew Hart: 9781451650020: Amazon.com: Books Pretty interesting book. I'm up to the part on the history of Chinese gold mining. Pre-modern technology for extracting gold from ore, they used to feed it to ducks. They'd mix it with chaff, feed the duck, pan the result, feed that to the duck mixed with new chaff, pan that, and then feed the duck chaff with no gold mixed in to scrape out any gold that was left in its digestive tract, and then pan that. Perhaps an origin story for the goose that laid the golden egg?

Not relevant to the question, I know, but something I thought was oddly interesting.

 

[Ruffnek]

FINALLY SOMEONE WHO THINKS LIKE ME!
I've asked that question a million times and even researched it and have yet to come up with an answer that satisfies me.In a bad situation,I'd much faster trade food,ammo,etc. for more food or ammo.The only use for gold or silver would be casting more bullets which,due the the fragile nature of such metals,would probably be a last resort.I've never,ever understood why a prepper would save up enough money to buy a handsome account of MREs or a decent amount of ammo just to spend the money on a practically useless bar of metal that can't feed your family,shoot an attacker, or close a wound.

Mister K has the only answer I've ever heard that approaches any logic.

 

[jd4320t]

How can you say they won't be worth much? They always have been and always will be. If the SHTF I'm grabbing a hold of every precious metal or gem I can.

 

[Ruffnek]

How can you say they won't be worth much? They always have been and always will be. If the SHTF I'm grabbing a hold of every precious metal or gem I can.

Picture this though:You and your family are stuck after a major event that totally destroys life as we know it.Someone comes to you and offers you a box of gold bars for the food that you have left.You take it and your family starves while staring at the shiny object.

I'd rather die knowing that I fed my family than saying "we were rich in the end".

 

[warthog]

How can you say they won't be worth much? They always have been and always will be. If the SHTF I'm grabbing a hold of every precious metal or gem I can.

They really haven't been all that valuable until you are well fed and have something to spend it on.

if this is how you act, then don't come to me for more of whatever it is you need. You will get pretty hungry too... and thirsty and heaven help you if you smoke. I sure don'y want your gold or gems if that's all you have though I will take it in addition. BBE does have a point with the bribing of those in power as they will be in charge of bater and I don't want them to have my food.

I have no doubt Gold etc will retain the lost of some and it would work for them but not the hungry of people who don't have a gun. You can be sure jewelry and pan shops will be armed so taking all you can get is going to be a bit hard too. Mostly I stockpile ammo and their constituents so I can make MORE ammo. I don't have a lot of extra money so I have no wealth to "protect" either. I still lack the mindset that buying silver and gold is a good thing to put away for prepping. For an investment while cash is still king though, it may just be wise.

 

[jd4320t]

Picture this though:You and your family are stuck after a major event that totally destroys life as we know it.Someone comes to you and offers you a box of gold bars for the food that you have left.You take it and your family starves while staring at the shiny object.

I'd rather die knowing that I fed my family than saying "we were rich in the end".

Who says that has to happen? Only a fool would give up their last food for gold.

Picture this:

You have your food, guns and ammo. You need something someone else has and they also have enough food, guns and ammo. This is where precious metals and gems can come in.

They really haven't been all that valuable until you are well fed and have something to spend it on.

if this is how you act, then don't come to me for more of whatever it is you need. You will get pretty hungry too... and thirsty and heaven help you if you smoke. I sure don'y want your gold or gems if that's all you have though I will take it in addition. BBE does have a point with the bribing of those in power as they will be in charge of bater and I don't want them to have my food.

I have no doubt Gold etc will retain the lost of some and it would work for them but not the hungry of people who don't have a gun. You can be sure jewelry and pan shops will be armed so taking all you can get is going to be a bit hard too. Mostly I stockpile ammo and their constituents so I can make MORE ammo. I don't have a lot of extra money so I have no wealth to "protect" either. I still lack the mindset that buying silver and gold is a good thing to put away for prepping. For an investment while cash is still king though, it may just be wise.

Who says you can't prep to have food, water, guns, ammo and precious metals? They will come in handy. If you don't think so that's fine and dandy. Most others do.

Also, why assume preppers with precious metals and gems don't also have everything else they need? It's too simple to do not to do it. All of my current silver is in 10z bars or rounds. When I get gold it will be in grams or smaller. It will be easily carried and I'll be happy to have it.

 

[Ruffnek]

They really haven't been all that valuable until you are well fed and have something to spend it on.

if this is how you act, then don't come to me for more of whatever it is you need. You will get pretty hungry too... and thirsty and heaven help you if you smoke. I sure don'y want your gold or gems if that's all you have though I will take it in addition. BBE does have a point with the bribing of those in power as they will be in charge of bater and I don't want them to have my food.

I have no doubt Gold etc will retain the lost of some and it would work for them but not the hungry of people who don't have a gun. You can be sure jewelry and pan shops will be armed so taking all you can get is going to be a bit hard too. Mostly I stockpile ammo and their constituents so I can make MORE ammo. I don't have a lot of extra money so I have no wealth to "protect" either. I still lack the mindset that buying silver and gold is a good thing to put away for prepping. For an investment while cash is still king though, it may just be wise.

Dint think he meant stealing it,I think he meant accumulating the proper way.But it just came out like he was going to go pillaging.

 

[jd4320t]

Dint think he meant stealing it,I think he meant accumulating the proper way.But it just came out like he was going to go pillaging.

Um yeah, not at all what I meant. I wouldn't steal or pillage.

 

[ModernGunner]

I agree with BBI in that it depends on what you're prepping FOR.

But the 'typical' scenario cited basically seems to be an 'every man (household) for him (them) self, the 'economy collapses', and everyone 'heads for the hills'.

Gold (silver, gems, whatever) is not 'inherently' valuable, it's a fictitious value arbitrarily agreed upon by parties 'A' and 'B'.

In such a scenario, lead and similar metals are quite likely to be valued much higher than gold, just like 'cows and cartridges' will be.

Guy 'A' might have 'several bars of gold' weighing in at 5# (2014 value, say $101,000), but zero ammunition for his AR-15. I have the equipment and make my own ammo, I'm the only supplier around, and this is hard times. I have no real need of gold, so I'm gonna give up just ONE - 20 round box of .223 for that 5# of gold. Take it or leave it, 'cause that rifle is kinda useless without ammo.

I'm holding what you need, so I decide what it's 'worth' for me to part with it. So, part with that 5# of gold, or be left unable to defend yourself, or hunt? Unless you're an anti-gun liberal loon, in which case you have 'worthless' gold AND no gun!

That's no different than society has seen in past decades in some foreign countries, where a loaf of bread was '$50,000' of their local currency.

'Money' of any form is fairly useless in those scenarios. Doesn't matter if that money is U.S. bank notes, gold, or diamonds. The whole 'gold panic - buy NOW' things ya see on television are simply scare tactics to get ya to buy THEIR gold at ridiculous prices.

The MOST valuable thing you can possibly own in such scenarios are skill sets. Second, items you can USE to rebuild your life. Firearms, tools, garden / farm equipment, repair / make / mend equipment, medical aid gear, etc.

 

[HeadlessRoland]

Gold is at least an intermediate store of wealth. Historically, gold and silver are rare, refinement has lead to almost absolutely perfect fungibility. I'd rather have my value in something that has an almost-infinitely lower rate of inflation. To produce more gold or silver, it has to be mined and smelted and refined and there's just not that much of it in general, a much more resistant medium than paper, which can simply be printed as per desire of the public-private (fascist) Federal Reserve by intaglio. So as money, it's a much better vehicle. Durability is much greater than paper, fungibility is equal to paper, and there has always been at least some small segment of the population willing to accept it as payment for most transactions in written history. Now, that last point is probably your sticking point, as it was mine for years. You can't eat gold, it's external ballistics are so terrible that it'd be useless as ammunition - why would anyone want to trade those little green rectangles for a metal that just sits there?

But the answer has gradually come to me throughout the years: gold just sits there. There's not likely to be an inflative (de-valuative) force with regard to the supply of gold. There may be temporary boosts in supply via the spot or futures markets, but the actual true supply of gold is not likely to expand much and if/when it does, it will be very very gradual, as new gold (and silver) are mined. Moreover, in a complex society, gold and silver and gems like diamond and sapphire have commercial and industrial uses, making them intrinsically valuable, with a purpose and value simply because of their chemical structure or physical properties. In the event of an intermediate to long-term societal collapse, these uses may be diminished due to a diminished need for them for their intrinsic purposes, but then they would still fall back to sole usage as a currency. Value-density is also high with gold. A stack of $1,250 one-dollar bills (close to the recent spot price for one troy ounce of gold) weighs almost three pounds. Granted, there do exist larger denominations of bills, but gold is a fairly dense store of value, especially in comparison to the continually-inflating, ever-devaluated paper fiat Federal Reserve Notes predominantly in use.

In order to feel truly comfortable utilizing any type of paper-value system, I would want it to be issued by a financially-solvent actor, not one several TRILLION (thousands of BILLIONS) of dollars in debt to other actors, and it would have to be a financial instrument that allowed for legal recourse in the event of non-redemption, such as suing for redemption in a court of law or equity. An example I'd be comfortable having as short-term paper-value would be bearer bonds from the Vatican. However, even these are prone to counterfeiting. There was a fairly recent story of a couple guys having almost-perfectly forged Holy See bearer bonds in the amount of several trillion. These counterfeiters were of course caught, but precious metals are more resistant to counterfeiting. Gold is especially difficult to counterfeit, owing to its relatively extreme density. Fakes do exist, but almost all are so unsophisticated that any non-bulk purchaser is able to easily recognize and differentiate them from the actual coins or rounds or bars in question. Now there do exist some complicated, sophisticated fakes with alloys and such, but again, this is orders of magnitude more difficult (melting, alloying, checking for density, re-applying a veneer of gold, and striking with detail) than simply firing up one's printer or stealing an intaglio plate.

North Korea has, for instance, produced $100 dollar bill Federal Reserve Notes (of a prior series) that were so technically advanced that the only way to tell that they were counterfeit was that the quality of the fine detail was actually greater than the true bills in question, and of course, serial number. Malevolent State actors have periodically done this throughout history to try to undermine the economies of rival or enemy States. But even at the level of the individual, paper counterfeiting is a problem. Printing technology is now such that there exist printers which can reproduce currency to such a quality that - while counterfeit - it is difficult for retailers or merchants to recognize them as counterfeit. Most of these now come with licensure clauses (or even software modification thanks to the advent of the EURion constellation security feature) disallowing use to scan or print images that even resemble currency.

For all these reasons, I now find it worthwhile in at least the intermediate term to hold at least a percentage of value in gold or silver (or gems, if it suits you). To the extent that I can save up currency and still convert it into gold for the intermediate term to stave off against inflation/devaluation, that's what I will do. This simply makes more sense to me than letting flammable, easily-counterfeited paper sit on my desk losing value daily due to inflation, or sitting in a bank where it loses value daily due to inflation, with the added devaluation of the bank charging me fees for holding it or refusing to pay me altogether thanks to fractional reserve banking and the strong possibility of bank runs. Just my thoughts on it, after a full 180 degree reversal on my position from a few years ago.

 

[Ruffnek]

Headache time...

 

[Txlur]

I want the gold. Give me the gold.

If you can afford to have some, why not? It's heavy? Just get a little bit then.

 

[catfishjn69]

This is my take. I am ready for a natural disaster but I have started to collect silver in the form of old coins. i am looking for any coins of high silver value, in my everyday change. i am not buying coins at a premium price just ones I find. now they have 2 values one as a precious metal value and one as a true monetary value. so a silver quarter is always worth .25 but could be worth more if the conditions were right. any thoughts

 

[HeadlessRoland]

This is my take. I am ready for a natural disaster but I have started to collect silver in the form of old coins. i am looking for any coins of high silver value, in my everyday change. i am not buying coins at a premium price just ones I find. now they have 2 values one as a precious metal value and one as a true monetary value. so a silver quarter is always worth .25 but could be worth more if the conditions were right. any thoughts

Conversely, I like Krugerrands because there is no set face value, they trade only on spot price. Government cannot limit its value to some arbitrary number they derive. The market decides the value.

 

[warthog]

I am just saying if you have limited funds, why stockpile what you can'y eat? I don't know any of you so maybe you have wealth you need to protect.

I am not a pillager ether to be clear. I am sure to remain a Christian and do some helping. I am not a fool either. Money. gold etc is to become a shiny trinket should the world's economy collapse. No doubt there will be many who succumb to greed so gold etc ill have some value but nothing like what it has now. You can't eat it and it doesn't do a thing to stop a horde... unless they want you money. I would give it over myself if that as all they were after but they wil want the stuff that really means something, food. guns and ammo. toilet paper and other comfort items, as well. God etc also makes you a bigger target for this type of horde.

I don't think your history lessons will hold up until things settle way down.

 

[HeadlessRoland]

I am just saying if you have limited funds, why stockpile what you can'y eat? I don't know any of you so maybe you have wealth you need to protect.

I am not a pillager ether to be clear. I am sure to remain a Christian and do some helping. I am not a fool either. Money. gold etc is to become a shiny trinket should the world's economy collapse. No doubt there will be many who succumb to greed so gold etc ill have some value but nothing like what it has now. You can't eat it and it doesn't do a thing to stop a horde... unless they want you money. I would give it over myself if that as all they were after but they wil want the stuff that really means something, food. guns and ammo. toilet paper and other comfort items, as well. God etc also makes you a bigger target for this type of horde.

I don't think your history lessons will hold up until things settle way down.

And I don't think something as large as society can stay 'collapsed' long enough for gold to completely lose all value. People need to eat, sure. And once the chaos clears and the dust settles, people will still need to trade, and they'll develop and begin to use another medium of exchange once barter again becomes impractical. Gold will become resurgent for this purpose once the market again rejects fiat currencies, as the market has inevitably rejected all fiat currencies eventually, cyclically. Nothing changes, it only repeats. From Diocletian onward, people crave and require sound money. Simply because we're thousands of years in the future from the romans who bristled at Diocletian's price edicts doesn't mean we are different from them or that the fundamentals of economics have somehow changed. Gold is currently treated as a commodity and not a true currency. In any sort of short-term to intermediate-term collapse, gold will again revert to currency instead of commodity, not losing its value. It will simply shift functions, from being hoarded to being traded as a medium of exchange, a true store of value.

 

[pudly]

I am just saying if you have limited funds, why stockpile what you can'y eat? I don't know any of you so maybe you have wealth you need to protect.

And there you have your answer. If you have limited resources, then gold and silver should not be high on your preparations list. Once you have accumulated some wealth and have setup your basic preps, then it is reasonable to hold some precious metals to protect that wealth. Even gold bugs generally don't recommend more than 5-10% investment in precious metals. It is a hedge against inflation and economic collapse, much like any other hard asset (food/ammo/real estate/etc). Take care of your basic needs first, then you can consider it.

 

[BehindBlueI's]

They always have been and always will be.

No, it hasn't. History is full of societies that ignored it, never had it, or valued it less than other commodities that we now deem almost worthless (including salt, jade, exotic feathers, obsidian, etc.).

Gold reserves have expanded dramatically, and the market is based almost 100% on speculation. Gold, as stated, just sits there. It does not draw dividends, interest, etc. The London exchange trades twice as much gold as has been mined in the history of mankind every 3 months. Its not being used for industrial purposes and jewelry making on that scale. Most traders are simply speculating with no intention of ever taking delivery of physical gold or using it for any purpose other than turning into cash. However, the interesting thing is they view it as a liquid way to store cash other than bank accounts, not as a substitute to cash, which is what most preppers who think gold will buy Hershey bars in a collapse seem to believe.