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Old 12-01-2011, 01:27 AM
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Default Let's settle post-SHTF value on Silver/Gold



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We have a pretty broad network of sorts here, and this is something That I have been wanting to get working on for a while. Your input would be appreciated.
Not screwing around.

So, before SHTF day, and thanks to today's deal with the EU it could happen almost overnight now, lets do some work on this and see if we can't some to some sort of standardized understanding while we still have the internet to work with.

"Junk" silver, which is really not junk, but 90% silver with hardening alloy, is old US currency of pre-1964 vintage Dimes, Quarters and Dollar coins. $1.45 in any combination is an ounce.
Newer US silver rounds are marked as dollars by the mint... not sure if they are being cute, but by the old reckoning they are equivalent to $1.50.

US ounces are marked as $50, half ounces at $25. I'm not sure I accept the 50-1 ratio with gold v. Silver, but that's how they are marked.
What say you all?


Now, to start with, what is this all going to be worth in our AlternateCurrency network, post-Collapse?
We could go back to the prices just before 1900, for example. Blue-collar workers made about $1.50 a day, a really good hotel was $1 a night, a meal could run about 15 cents. A pistol about $10, a beer or a loaf of bread 5 cents, and so on.

Those are just examples.
Lets not be greedy or silly here, just a scale of some sort to get a sense of balance. We might have reason to be glad we did, someday.
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Old 12-01-2011, 03:28 AM
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You have to start by making a distinction between paper metal and physical metal. Right now, the daily price discovery is established in the paper market and this carries over to the physical market.

Once the dollar crisis begins in earnest, a widening gap will develop between the paper and physical markets until each has it's own price discovery mechanism. While, you'll still be able to buy paper metal at enormously high prices, physical metal will become unobtainable at ANY price for a short period of time, weeks, perhaps months. After things calm down, then shortages will go down, however my opinion is that the physical market will then overtake the paper market as the primary price discovery venue.

Before FDR was president, the government capped the price of gold at $25 an ounce. FDR revalued gold to $35. At the time he revalued, the ratio of gold held by the government to the dollars in print was about $34 for each ounce of gold held by the government.

To return to that ratio today, gold would need to be valued at somewhere around $8,000 to $10,000 per ounce. If we enter a crisis period and the Federal Reserve prints a large amount of money between now and the dollar crash, then this number will go up - conceivably to infinity as in the recent case of Zimbabwe where citizens could enjoy a sit down lunch for $Z10 just 8 years ago but had to pay upwards of $Z100 Trillion dollars just 5 years later.

I think you also have to make a distinction between gold and silver. Both are precious metals and both are money, but silver is also an industrial commodity. My thinking is that we'll see gold emerge as an alternative currency first, and silver will tag along as the stepchild. It's difficult to say how far or fast silver will climb, but the historical ratio of 1 to 16 or even 1 to 12 are useful. If gold goes to $8,000 then you could expect that silver would go to $500. This also means that silver is the better investment today.

Another ratio of note is the Dow:Gold ratio. A 1:1 ratio happened in the last gold bull market and there's no reason why it won't happen again. Will it be Dow 20,000, Gold 20,000 or will it be Dow 1,000, Gold 1,000? No one knows yet, but trading one ounce of gold for one share of the Dow will be a good buy in anyone's book making gold an excellent investment even at today's prices.

As for day to day living costs paid with metal... This is very hard to equate to prior generations because production methods are so different. A pair of pants made on a steam powered loom and hand stitched in the early 1900's can't really be compared to a pair of pants made on a high speed loom with prison labor in China today. Using the last bull market in the 70's, you could by a brand new Cadillac with 3 ounces of gold and you could buy a well maintained median priced home with one 715 ounce bag of junk silver. Keep in mind that the dollar did not collapse in the 70's - it just went down a bit. If we have a dollar crash, then all bets are off.
Old 12-01-2011, 08:31 AM
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I was just looking at the same thing. Your talking when we used the gold standard and before the depression a stable $18 to $19 per oz for a couple hundred years.
Old 12-01-2011, 08:41 AM
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Another thing to add is I can't find a point in the gold market where prices went from $271.04 a oz in 2001 to 1745 a oz in 2011.
Old 12-01-2011, 08:54 AM
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I think we have to get away from the $ per oz mind set once shtf...

A days labor would be good basis - 1 oz silver = x/d labor (1/2 day, 1 day, 2 days.??)

then a silver to gold ratio would have to be determined.
Old 12-01-2011, 09:06 AM
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In a P-SHTF scenario we have no way of predicting its worth.

You show up at my place, I have enough foodstuffs and ammo, guns etc to last a lifetime for me and my family, you have a bar of gold and you are tired thirsty, hungry, no gun, no ammo.

So what is the bar of gold worth to YOU? Well how thirsty are you, how hungry, how bad do you need guns/ammo.

If we could even remotely predict the value of gold/silver tomorrow let alone P-SHTF we could all get rich real fast. Since we cannot do any more than speculate what todays spot closing of Gold.Silver will be how can we project the value in an unstructured world.

Or

I can tell you what YOUR gold bar is worth to me..."1 sip of water" if I think you are thirsty enough and we are standing in the Sonoran desert. If on the other hand we are in the middle of the ocean and you swim up to my survival boat, then your bar of gold is worth 1 life how long can you tread water?
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Old 12-01-2011, 09:26 AM
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Originally Posted by maine-marine View Post
I think we have to get away from the $ per oz mind set once shtf...

A days labor would be good basis - 1 oz silver = x/d labor (1/2 day, 1 day, 2 days.??)

then a silver to gold ratio would have to be determined.
A day of who's labor? A field laborer or a doctor? Fixing labor prices would amount to socialism. The price or value of a PM will be exactly what you can get for it on a given day.
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Old 12-01-2011, 09:36 AM
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A day of who's labor? A field laborer or a doctor? Fixing labor prices would amount to socialism. The price or value of a PM will be exactly what you can get for it on a given day.
or how about a doctor doing field labor???
Old 12-01-2011, 09:49 AM
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Better to establish your ratio against other metals.

10 copper pennies = 1 silver dime
10 silver dimes = 1 silver dollar
20 silver dollars = 1 oz gold coin

1 days manual labor = 25 copper pennies
1 lb loaf of bread = 2 copper pennies
1 iPromotion = 1 silver dime
Old 12-01-2011, 09:49 AM
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I pay him in taters!
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Old 12-01-2011, 10:15 AM
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Originally Posted by SavageSun 4x4 View Post

In a P-SHTF scenario we have no way of predicting its worth.

You show up at my place, I have enough foodstuffs and ammo, guns etc to last a lifetime for me and my family, you have a bar of gold and you are tired thirsty, hungry, no gun, no ammo.

So what is the bar of gold worth to YOU? Well how thirsty are you, how hungry, how bad do you need guns/ammo.

If we could even remotely predict the value of gold/silver tomorrow let alone P-SHTF we could all get rich real fast. Since we cannot do any more than speculate what todays spot closing of Gold.Silver will be how can we project the value in an unstructured world.

Or

I can tell you what YOUR gold bar is worth to me..."1 sip of water" if I think you are thirsty enough and we are standing in the Sonoran desert. If on the other hand we are in the middle of the ocean and you swim up to my survival boat, then your bar of gold is worth 1 life how long can you tread water?
This is pretty much what I think. Well said.

These (gold and silver) are the only things of value that will retain value after recovery.

A man that hustles and gets into trading may well come out rich after recovery, as SS points out there is a great amount of leeway during the bartering process as to what it is worth.

My preps and stocks are worth way more than gold during the crisis. It's the wise speculators who have plenty to barter for gold and silver who will come out on top after the crisis passes. And it is wise people who choose to keep their preps that will come out on top during the crisis.

Then there's that oh so irritating notion that the government can make it illegal to possess gold that bothers me. That's plain wrong. Very wrong! But it is a possibility I guess. The wise trader might have to get PMs out of the country to cash in at a fair value if this were to occur.
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Old 12-01-2011, 10:16 AM
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10 copper pennies = 1 silver dime
What is the cut off date for copper pennies?

And from reading another thread I "think" that people will take down all copper anywhere it can be looted. That would dilute the value of a copper penny, along with taking down the infrastructure.
Old 12-01-2011, 10:25 AM
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Originally Posted by maine-marine View Post
I think we have to get away from the $ per oz mind set once shtf...

A days labor would be good basis - 1 oz silver = x/d labor (1/2 day, 1 day, 2 days.??)

then a silver to gold ratio would have to be determined.
Exactly. The whole reason to have PMs is to eschew the folly of FRN's. The FRN is NOT a fixed mark. Denominating ANYTHING in dollars is futile. You might as well denominate them in measures of fairy dust or handfuls of magic beans.
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Old 12-01-2011, 10:26 AM
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YES YES YES... MM hit the nail on the head and bashed it straight.

Any logic that includes a $ in the equation, post SHTF, is immediately flawed. The structure will be redefined, maybe on a state level, but more so on a regional level, maybe even a down to the neighborhood. Who knows. Let's all keep in mind that where we are heading is unchartered.

But PM's will have "value" according to the person on the other side of the trade. Unless there is some unified system put in place, and depending on your idea of what SHTF looks like there may not be any "system" at all, the "value" of anything post SHTF will be up in the air and dependent.
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Old 12-01-2011, 10:31 AM
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YES YES YES... MM hit the nail on the head and bashed it straight.

Any logic that includes a $ in the equation, post SHTF, is immediately flawed. The structure will be redefined, maybe on a state level, but more so on a regional level, maybe even a down to the neighborhood. Who knows. Let's all keep in mind that where we are heading is unchartered.

But PM's will have "value" according to the person on the other side of the trade. Unless there is some unified system put in place, and depending on your idea of what SHTF looks like there may not be any "system" at all, the "value" of anything post SHTF will be up in the air and dependent.
This is the true beauty of the system as it will exist. There is no need to moderate the value. It will truly be a free will arrangement.
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Old 12-01-2011, 10:58 AM
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This is the true beauty of the system as it will exist. There is no need to moderate the value. It will truly be a free will arrangement.
Right - and in a true SHTF event.. where there is no communication... value is what value is..

Some folks in Maine may accept an oz of silver for a days labor while in Texas they may want 2 days labor.

What will matter is that both parties agree to the deal. (Not that both sides are happy about the deal)

A doctor may accept 2 oz of silver for delivering a baby because he knows that down the road there is a farmer selling eggs and chickens for x amount of silver or he may demand 2 chickens and 1/2 dozen eggs a week for 3 weeks.

harmless drudge may have a shovel I need and he is willing to sell it for 2 oz of silver because he knows that he needs a new handle for his grain mill that a guy down the road is willing to sell for 2 oz of silver.

OVERALL - I think those folks that do not have any silver of gold put themselves at a disadvantage because PM's can act as a VALUE PLACEHOLDER when it comes to bartering.

YES YES - know some folks want an oz of gold for a sip of water... but over all I think that we would see common sense trades where both parties walk away with what they need and they view as a fair trade.
Old 12-01-2011, 11:12 AM
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Originally Posted by FranchiseKid View Post
YES YES YES... MM hit the nail on the head and bashed it straight.

Any logic that includes a $ in the equation, post SHTF, is immediately flawed. The structure will be redefined, maybe on a state level, but more so on a regional level, maybe even a down to the neighborhood. Who knows. Let's all keep in mind that where we are heading is unchartered.

But PM's will have "value" according to the person on the other side of the trade. Unless there is some unified system put in place, and depending on your idea of what SHTF looks like there may not be any "system" at all, the "value" of anything post SHTF will be up in the air and dependent.
So what are PM's? They are "Train Riding Dollars", that is what they are:

When East met West with the connecting of theContinental Railroad it had a MAJOR impact on the US not generally attributed to it. And that was the phrase train riding dollars. Prior to the Continental railroad local banks cities, states issued their own money and it worked quite well reflecting the local economy. But the railroad changed that. Suddendly someone was buying a ticket in Richmond Va taking the train to San Francisco. And those bank notes issued by the Bank of Richmond were worthless out side of Va. So the train would ONLY take US money, gold and silver or Train riding dollars...
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Old 12-01-2011, 11:52 AM
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What is the cut off date for copper pennies?

And from reading another thread I "think" that people will take down all copper anywhere it can be looted. That would dilute the value of a copper penny, along with taking down the infrastructure.
New coinage or only those that were made before they removed the majority of the copper. The supply of anything tends to dilute its value. Truth be known, silver is overvalued because it is not in short supply. I think I heard the figure of it took only $17 dollars to mine and refine new. Back when the photography (film) industry use tons of silver there was industrial demand that could drive scarcity. Nowadays silver is used in much less quantities.
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Old 12-01-2011, 12:27 PM
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New coinage or only those that were made before they removed the majority of the copper. The supply of anything tends to dilute its value. Truth be known, silver is overvalued because it is not in short supply. I think I heard the figure of it took only $17 dollars to mine and refine new. Back when the photography (film) industry use tons of silver there was industrial demand that could drive scarcity. Nowadays silver is used in much less quantities.
The loss of silver demand in photography is fairly big, but silver is being used in many new technologies. Anti-microbial clothing and medical supplies ate just 2 of the new uses for silver and these uses will grow in demand. There are many other newer uses as well.

1982 was the cutoff date for the traditional copper content.

http://www.coinflation.com/coins/190...nny-Value.html
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Old 12-01-2011, 12:40 PM
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Originally Posted by SavageSun 4x4 View Post
In a P-SHTF scenario we have no way of predicting its worth.
THIS.

MY guess, though? Immediately after SHTF, its value will be relatively low, but will rise as more people are willing to part with their goods for precious metals. Early on they'll be loathe to do so, but as stability returns, they will begin thinking of the future, and their need to purchase goods they cannot produce. Then metals will become a fair exchange again. My guess though is that it will probably not be more than twice as valuable as it is now, nor likely at any time less than 1/4 of its current value, in terms of buying power.
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