Will Gold and Silver be valuable?

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You can’t eat gold.

I have heard that phrase so many times in the past whenever the subject of prepping turned to an economic collapse and the importance of buying precious metals was proposed as a solution. There are several facets to the debate around the usefulness or necessity of having gold and silver on hand but I wanted to take a couple of swings tonight and see what everyone else thought. You do seem to see people who swear by precious metals and they are admonishing everyone to go out and buy as much silver as possible. There are others who are feverishly collecting “junk silver” and spend I can’t imagine how much time pouring over bags of dimes from the bank.

There are others who say buying gold or silver is foolish and this is usually for two reasons. The first is the title of this article. You can’t eat gold, so if you are starving what good is it? I guess more accurately, it would be if nobody will give you anything to eat for the gold what good is it? The second argument is usually from the financial types that say Gold is headed for a correction and any money you put into gold now would be wiped out if the market “decides” that gold has no more value.

I will say right now that I am not an expert on precious metals. You could look at my bank account and say I am not an expert with my regular bills probably. I do not have an economics degree and I don’t understand the intricacies of financial markets. To be honest, I think the whole game is rigged and no matter what you know, there are very few experts but there are quite a few people who know how to play the game. What I want to share with you is only my opinion based upon the facts as I understand them within the conversation about whether or not you should plan on holding some precious metals and I would like everyone who cares out there to share your opinions and maybe we can all learn something.

The reason for this post is an email I received from Mark. In his email he asks some great questions

I have read on PJ and many other prepper sites about the importance of buying and storing gold or silver for when the SHTF.  However, as I imagine an emergency happening (like a Long Term electrical grid down), you and I would have a very short time to use US currency to purchase supplies before all merchants stopped selling their goods.  My neighborhood “Mom & Pop” grocery store and hardware store owners kept open during the 2012 week-long power outage here (due to a derecho), but Walmart and other chain stores shut down immediately due to their reliance on electronic inventory and cash management systems.

Once folks realized it was Long Term, why would any neighbor or merchant trade away something of use, like food, fuel, or tools, for something which does not have any independent use, like gold, silver or US currency?  It makes more sense to me to stock up on barter items  (like those listed here at the BackDoor Survival site ), and have enough cash on hand to buy as much as possible from the corner stores immediately after I see that a Long Term emergency has started.

If gold or silver would be useful at some point, when would that be?  Who would accept it as payment for goods or services?

The main questions Mark is asking are will gold and silver be valuable and who would accept this as payment?

Will Gold and Silver be valuable?

I think we have to honestly say “it depends”. Precious metals have a value now, but only because they are in demand and the market says they are worth a certain value. There are people willing to pay for your gold or silver at a certain amount. The amount people pay has varied wildly in the past. In 1970 you could buy an ounce of Gold for $36. Today according to JM Bullion, Gold is selling at close to $1300 an ounce.

The market has always gone up and down and that is why they say any investment is risky. Can you imagine paying $1300 for an ounce of gold only to have that ounce be worth $30 the next day because of some market implosion? It’s no different with stock. You could purchase 10 shares of Apple today for $570 a share and something weird could happen in the news to cause Apples stock to crash next week. If that happened, all your investment would be worth less than you paid. Investing to me is gambling.

Each of you has to analyze the risks associated with purchasing anything. Gold and Silver are no exceptions, but the way we seem to depend on them as preppers or even investors is different than say, stocking up on hard red winter wheat stored in 5-gallon buckets. Gold or Silver is supposed to preserve our wealth but we rely on them maintaining their value in the future. If they don’t hold some value, what can you do with them?

Who would accept Silver as payment?

Getting back to Mark’s question which seems to be the most important one we preppers need to think about. Who would give us anything for our Silver or Gold that we purchase now? For this I see two largely polar examples.

The first example is that we go on without any global economic collapse. There are no wars and everything is fine generally speaking. If this happens, you should look at any precious metals purchase as a hedge against inflation. As long as you hold that precious metal, and provided the price doesn’t drop below what you paid for it, you can always sell it to recoup your money. This assumes that inflation will always rise and the value of your dollars will be less. We are already seeing signs of this.

The second example and one that I believe is more likely is that we will have massive economic troubles ahead. Are they going to be so bad that paper currency is worthless? Maybe. I have purchased my own supply for that reason, but I don’t think we would be able to walk into the local Mom and Pop store, lay down a few pre 1965 dimes or a 1/4 ounce gold coin and walk out with armfuls of food and a goat. First, I don’t think Mom and Pop will have any food for very long as Mark said, but more importantly, I think a system where people give value to gold and silver could take a while.

The value of precious metals will be there I think, but if it all goes to hell in a hand basket, you won’t be able to use that gold or silver for a while I think primarily because the majority of people don’t know anything about precious metals. Money to them has dead president’s faces on it. If you offer to pay for something with a silver round, you will have to first convince the person you are trading for that your coin is real and you would both need to mutually agree on the value. This will take some time I think and we will be bartering goods for a long time before we are paying with precious metals.

Why do I have them myself then? Because I am gambling too I guess. I am betting that our paper money is going to lose value more quickly than Silver. I guess only time will tell if the naysayers were right and I end up wishing I would have traded that silver for bread or lead or something else.

What do you think?

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kate
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kate

If the Gold you own is in another country, then all you really have is a receipt. Even if you could somehow manage to get there to get it, would it really be there? You know that all transactions are monitored. Everyone who has bought Gold is on a list somewhere, In 1933, I think, the PRESIDENT issued an order which required everyone to turn in all Gold to the government. It became illegal for citizens to possess gold. They were threatened with imprisonment for withholding even ONE Gold coin. Why buy Gold just so you can have it taken… Read more »

Pat Henry
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Kate,

Totally agree with having your gold or silver where you can reach out
and touch it. I do not mean a bank safe deposit box either. Like Larry, I have taken what I feel is a diversified approach to owning precious metals. I don’t have all of my money tied up in gold or silver, but I have what I think is a reasonable amount.

Most of my preps are like you said in food, guns, ammo and supplies that will keep me alive. The precious metals were me cashing out my 401K before anyone could do that for me.

Pat

Lawrence Black
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Lawrence Black

Was my post deemed unfit? It disappeared.

Pat Henry
Guest

Sorry Larry,

Your post had what they thought was a link (no space between wiiling a period and to) so it flagged it.

Lawrence Black
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Lawrence Black

My bad. I’m typing on my new smartphone and prolly goofed.

Lawrence Black
Guest
Lawrence Black

Repost. Let’s try again. I’ve decided to convert about 5-10% of my net worth into precious metals. Kate is right, to a point. You do need guns, ammo & barter items but, in the likely event of the collapse or even “just” a major devaluation of the dollar gold and silver will be about the only things left that will have retained any purchasing power. Why would a merchant accept paper money he knew would likely be worthless before the end of the month? We could see the days return when merchants keep scales behind the counter a la the… Read more »

Andi
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Andi

I would say a good diversity of everything anything is good to have of Corse you don’t have only gold or only silver but it doesn’t hurt to have a few coins what for sure is gong to be looked at before some paper money in case of !! What I also think and I believe is, I read this here on the PJ is Alcohol I few bottles of Rum, Vodka, Whisky will get you a lot stuff! SHTF or today the rule would be the right stuff at the right time and you are ok.

fortunes4
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fortunes4

I would agree that a diversified assortment of items to use is the best way to go. Metals you can touch is a must. Think about your preps this way, would you stockpile preps such as food, water and ammo in another part of the world?? Didn’t think so. If you are using it as a source of prepping you have to have complete control over it. On the topic of bartering, I looked at the link in the article and wondered if others did, what their thoughts were on the list of 40 items to use in bartering. Thoughts… Read more »

Bobcat-Prepper
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Bobcat-Prepper

Another great conversation-starter of a post, Patrick. Every time I think about precious metals, I say to myself, “for $1300, what else could I buy to make a SHTF world better for my family?” A couple of pistols, 100+ buckets of grains, all kinds of solar power systems, etc make the cut before 1 ounce of gold comes into consideration. Some thoughts on that barter list: 1) Painkillers – I wouldn’t want to offer any prescription pain-killers, out of concern for the dangerous crowd that they would attract. But the OTC stuff is just fine – no ibuprofen addicts out… Read more »

Pat Henry
Guest

Thank you very much Bobcat! I know what you mean. Investing in precious metals is a gamble. Those pistols are less of a gamble. For tangibles, you can easily see and feel their use. Gold and Silver are pretty but you do have to have a longer view of their usefulness I think. For my part, I am not looking at these metals for any relief in the short-term, although that isn’t really out of the realm of possibility either. If all hell broke loose, you could potentially bribe someone for safe passage with that gold or silver. Could you… Read more »

SAM MYOTT .....FROM NC
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SAM MYOTT .....FROM NC

I WILL FEAR NO MAN AS I AM READY FOR THIS TO COME I LIVE IN NC A SMALL TOWN KERNERSVILLE NC
READY TO CALL HAVE THE GOLD IN HAND NOTHING IN A BANK…..THE WEPONS I NEED..FOOD..WATER
HOPE U ALL ARE READY
SAM MYOTT

JENNY M INGRAM .FROM NC
Guest
JENNY M INGRAM .FROM NC

YOU PEOPLE ARE NUTS LIKE SAM MYOTT IS HE WOULD TRADE HIS LIFE FOR JIM BEAM
JENNY M INGRAM

jenny m ingram NC
Guest
jenny m ingram NC

it’s no god ..goddamn a god…….he’s real hahahaha & I love Being whore & sam myott is a crazy drunk gay wished he had a new lover William his lover is mad at him.
Jenny Mcgowin Ingram
Kernersville NC 27284
give us a call bi or gay
336-831-6595

Stebo
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Stebo

Gold & silver has been valued for thousands of years and that will not change. It’s human nature to want items of beauty and wealth. What does change is what values is placed on these items.

frank6th
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frank6th

In India the private citizens hold 9% of the worlds gold reserves. If it all goes to shit as they say that’s a lot of gold that is going to come onto the market in hope of buying food. Prepping is like insurance against whatever, so why not hold a few gold coins that are minted as legal tender just as a fall back position, but don’t go overboard with it, as your better spending it on other prepping.

Richard Bryant
Guest
Richard Bryant

The issue regarding gold and silver is with regard to the nature of the disaster. If the disaster is sudden and total (EMP) then bars of soap may prove to be worth more than bars of gold. However, if the disaster is hyperinflation, then those with debt may have the option of converting their metals into almost-worthless dollars and instantly paying off mortgages, etc.

The only risk here would be with regard to government confiscation of metals. If that transpired, and if I owned metals, you can bet they would instantly be lost in a “tragic boating accident”.

Richard Bryant
Guest
Richard Bryant

Precious metals could also be beneficial to those who currently have debt. If we experience hyperinflation you may be able to, for example, pay off your mortgage by simply selling a couple of gold coins. Given the mass evictions of Americans during the Great Depression (I always recommend that all preppers watch the first half of “The Grapes of Wrath”) you can imagine how important that would be. In fact, even if your metal stores were not sufficient to pay off an entire mortgage, the sale of them might provide the dollars needed to make 3-4 years of mortgage payments… Read more »

Pat Henry
Guest

I agree with you Rich that now is the time to purchase precious metals if you haven’t already. Your 401K is up for grabs and forget about retiring with the windfall from your mutual funds. Precious metals have shown their value over time and it is built on something tangible, not the perceived market value of a piece of paper. I would like to think that in a perfect scenario, my meager collection of precious metals could someday be worth hundreds of times what I purchased them for and I could settle all my debts, but I don’t know if… Read more »