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Survival Nerd
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Discussion Starter · #1 ·
Ok, first off, let me preface by saying that I DO think that in a pre-SHTF world gold and silver are a great way to insulate from inflation and diversify a portfolio. This is largely due to the fact that there are universally accepted markets for buying and selling gold and an index (spot price) that everyone agrees on.

The issue I struggle with is why so many preppers think that gold and silver will have any more value post-SHTF than paper money. Much like money, you can't eat gold or silver, they aren't materials that are of much use in post-SHTF survival trade craft. So what is the story there? Or am I not understanding the theory correctly? Is the investment of Gold and Silver more about pre-SHTF prep and portfolio diversification?
 

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There are many who will be traders on the traveling marketplace (gypsies) who will trade you for silver or gold and then trade you silver or gold for more products to trade with you for more gold or silver..........

Personally I would rather trade someone some gold and silver than some sort of weapon or something which could be used against me at a later date..........
 

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Capability, not scenarios
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After TSHTF, why do you think the wastepaper which is fiat currency will have any value at all?

Gold and silver have value in part because of their relative rarity--and you can't just print it. Fiat money, of course, is not rate, and you can always make more.

Precious metals have always had value as money. As a medium of exchange, PMs will be important after TSHTF, as barter only works to some extent.

Fiat money *will* have some value after TSHTF. That is, it will substitute for toilet paper.
 

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Capability, not scenarios
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I personally think .22 ammo will be the currency of choice because it has utility and it isn't a military grade ammo.
Suppose you wanted to trade with me. I have plenty of .22 ammo. What else you got?
 

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Survival Nerd
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Discussion Starter · #6 ·
After TSHTF, why do you think the wastepaper which is fiat currency will have any value at all?

Gold and silver have value in part because of their relative rarity--and you can't just print it. Fiat money, of course, is not rate, and you can always make more.

Precious metals have always had value as money. As a medium of exchange, PMs will be important after TSHTF, as barter only works to some extent.

Fiat money *will* have some value after TSHTF. That is, it will substitute for toilet paper.
I think you miss my point. I agree that fiat money will be worthless. My question is why do "precious" metals retain value?

Here are the reasons I've heard:
  • Its rare
  • Its portable wealth
  • It's always been that way

... none of those reasons sounds like something I'd want to rely on. Its rare, well so what? If you can't use it to survive what good is it? Is it simply that everyone *thinks* it represents wealth and therefore it has value? That sounds a lot like what money is today. The perception of value is what makes gold and silver valuable.

... its "portable wealth", I agree that its portable ... but to my original point, why is it considered *wealth*?

... "It's always been that way", This explanation really bothers me ... because it really isn't an explanation. Its like asking "Why does it rain?" and answering with "Because it always has in the past!".

I'm not looking for a lecture on fiat currency (sorry, I know that sounds trite) ... I just honestly what to understand why gold and silver would have any value post-SHTF.
 

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Capability, not scenarios
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I think you miss my point. I agree that fiat money will be worthless. My question is why do "precious" metals retain value?

Here are the reasons I've heard:
  • Its rare
  • Its portable wealth
  • It's always been that way

... none of those reasons sounds like something I'd want to rely on. Its rare, well so what? If you can't use it to survive what good is it? Is it simply that everyone *thinks* it represents wealth and therefore it has value? That sounds a lot like what money is today. The perception of value is what makes gold and silver valuable.

... its "portable wealth", I agree that its portable ... but to my original point, why is it considered *wealth*?

... "It's always been that way", This explanation really bothers me ... because it really isn't an explanation. Its like asking "Why does it rain?" and answering with "Because it always has in the past!".

I'm not looking for a lecture on fiat currency (sorry, I know that sounds trite) ... I just honestly what to understand why gold and silver would have any value post-SHTF.
Reason one: It always has. A certain number of people uncertain about the direction of the future will look to PMs, will realize PMs have always had value, and will decide that they're worth holding. If you will, consider it "inertia," in that people are used to it having value.

Related to that, there are always going to be people who want and will crave precious metals. For those people, it will have value and thus, for you, it will as well if you can get it.

Reason two: It will, IMO, have value as a medium of exchange. I know people will say that things like .22 ammo will be "currency," but they're consumable; PMs, in that context, are not. I know a lot of people want those consumables to be "currency" because they're prepping or stocking them, but unless you can produce more...

You don't destroy gold or silver in their use as a medium of exchange. Things like .22 ammo? It's used up.

Reason three: Look at Ferfal's analysis of the breakdown in Argentina. PMs, including in the forms of jewelry, had value as "currency." So there's recent evidence that it will be accepted and sought after.

Reason four: The S would have to HTF world-wide. Imagine what value gold had in Zimbabwe with the hyperinflation. Did it have no value? No--it had value because it could have been taken elsewhere, to another country, where it still had value.

That's why, BTW, that rich people in the middle east like to have a certain amount of their assets in gold--it can be taken anywhere and converted to the local currency. And as the strife in the middle east has increased, why have people bought gold and not, say, .22 ammo? Because they can't carry that elsewhere and convert it.

What this means is that if PMs are valued anywhere, they'll be valued here. If gold is worth 1000 Euros, but here we've broken down, there will be trade routes and traders who will seek gold here in order to convert it to Euros in Europe. That means, then, that it will have value here.


Now, if it comes down to it and people are hungry, food is very scarce, and people don't have enough, it's likely no amount of PMs will buy that food--i.e., the price will skyrocket. And even then, they won't trade what they can eat for what they can't.

But those scenarios are at the extreme end of the distribution of all possible scenarios. IMO, the vast majority of scenarios will include an environment and "economy" in which PMs will be useful as "money."


In the end, we'll all have to decide the role PMs play in our preparedness. For those just starting out, probably not as much; for those who are well-established, they give them much greater consideration.
 

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Sibi Totique
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The biggest problem as I see it as the ”post-SHTF” idea. I have personally arrived at the point when I think these ideas (SHTF and TEOTWAWKI) do more harm than good. They mean everything and nothing.

Gold and Silver are physical investments that you can touch and feel. They have been used historically as a means of payment and can be a good part of a broad overall economic strategy in order to be prepared for a crisis. I’ve talked to people from Bosnia how did not manage to use gold as a successful way of purchasing products that they needed – Gold and Silver can be useful, but there are needlessly to say scenarios when they will be of little use as well.

The price of Gold and Silver seems to be in a “bubble” right now, it can be a good investment but anyone how’s making an investment must realize that the price could continue to go up, or sharply go down.
 

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Look at Salt during the Roman Empire. That was a primary tool to paying soldiers, hence salary and a man not being worth his salt. I think we will see a readily usable currency when SHTF but as an economy gets more advanced you will see more of a prescious medal type of economy.
 

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Maximus
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...
The issue I struggle with is why so many preppers think that gold and silver will have any more value post-SHTF than paper money. Much like money, you can't eat gold or silver, they aren't materials that are of much use in post-SHTF survival trade craft. So what is the story there? Or am I not understanding the theory correctly? Is the investment of Gold and Silver more about pre-SHTF prep and portfolio diversification?
Those with good foresight and already well prepped would have done well do well to also trade for gold and silver during SHTF. Reason is SHTF will eventually pass. Just like Katrina would eventually pass, just like Hiroshima, just like Chernobyl, fall of Russia etc etc and then they would have to join the rest of the world again.

Say you do trade a Gold Eagle during Katrina for some food and ammo. Or 10 gold eagles for a handgun or something. Does that gold do any good at that time? Surely not; they are hunks of metal at that point. But look 3 years later. That person has 1,000$ for that food and ammo that cost 20$ to replace. Or a handgun that cost them a few hundred now has 15,000$ to spend on other preps.

Why do so many plan for the SHTF event and not AFTERWARDS?!?! It is like the couple that puts so much planning on the wedding and spending 20 grand but never think about the 50 years AFTER the wedding...

Every SHTF scenario since the dawn of modern man has re-joined society and rebuilt again... why would you think the next event would be any different???

Can you argue this fact or are you still stuck on a "Fantasy SHTF" that has yet to happen since recorded history?
 

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Beware of the dog!
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If and when the time comes value will be determined by who you are dealing with. I would rather trade off products I can produce for products I cannot produce. Gold or silver may do well in some areas, but if your neighbors do not want gold or silver it wont be of value to you. I would never trade ammo or weapons to outsiders as they could be used against me. This includes .22 ammo which can kill as fast as any other caliber.

Gold and silver will be good to have, but I would not put off other preps just to stock up on gold.
 

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Technically, gold and silver will have - DO have - no more value than other rare metals. They have some chemical, industrial, and health uses, and produce shiny effects when used in jewelry and art. Aside from that, it's like Mule Skinner said: People want them because people want them, now and then. Centuries of cultural programming have convinced people gold and silver are 'wealth', and I doubt even TEOTWAWKI will change that. It may even intensify the attitude, in fact. So as part of your investment protfolio, and disaster preps, gold and silver may well have a place. Just not a very big place.

And regarding the statement you can't EAT gold, silver, or fiat currency: Well, of COURSE you can. But it won't do you much good. And will probably taste terrible. :thumb:
 

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Capability, not scenarios
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I have 500 lbs of gold. What else you got? Seriously need a better argument than that.
No, I don't. I don't need .22 ammo. I have several thousand rounds. What else do you have that I might want other than .22 ammo?

If you don't have anything I want, you can't get what you want--unless you can trade me something *I* can trade with *others* to get what I want.

That's the whole idea behind a medium of exchange. It bridges the gap between those who would barter but whose needs don't match to allow barter to work.


FWIW, I have .22 ammo, and a lot of it, not because I think it will be all that useful as barter or currency, because I don't, but because I might be wrong about it.

I also have other items that may be useful for barter, including peppercorns, canning lids, emergency candles, feminine hygiene products, spices, smaller packages of food (though I changed my thinking mostly away from trading food), monolithic water filters and calcium hypochlorite for purifying water.

And some PMs (in the form of junk silver coins), though not a ton. I'm prepped for a scenario in which PMs have no value (a scenario I consider very unlikely) as well as scenarios in which they do.
 
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Survival Nerd
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Discussion Starter · #17 ·
With as many threads as there are on precious metals here, you had to start another one?
I know Mike. I tried finding answers in other threads but I'm either very dense (quite possible) or the answer isn't there.

People either think it will have value or they don't ... there are many explanations for why other materials, goods, or services would have greater value and a lot of justifications for that position which I can easily understand. There are even more rants on the evils of fiat currency and why we should return to the gold standard.

However when the argument comes around to the pro-metal-post-shtf side, the reasons just aren't as clear to me. This was the point I was trying to get at with this post.

During times of economic wealth, I get it. Things like diamonds, gold, silver etc have value because of the presence of a market that makes it possible to exchange from currency into metals and back. I suppose a market could just as easily exist in some form post-SHTF ... but the arguments that there is inherent value in precious metals simply because it's "always had value" or "its rare" seem to be of little true value when you are struggling to survive or live in a barter society.

In spite of this, so many prominent survivalists swear by precious metals. I just haven't been satisfied with the explanations as to why. I must be missing something.
 

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With as many threads as there are on precious metals here, you had to start another one?
Add to that the fact that it maybe counterfeit,if I can't live in it,eat it,protect myself or drink it,it has no value.I'm gonna trade you two dozen eggs for a fake silver dollar?
Shelter,warmth,food and water and I am good.
People who think the economy will be the same as it is now are gonna get a shock when you are growing your next meal.
Kev was right,bartering for a counterfeit metal is out of the question when your stomach is growling for food.
 

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Survival Nerd
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Discussion Starter · #19 ·
Reason one: ...
Goose3, is it fair to say that if the SHTF is limited geographically (e.g. within a country you live in) and there are still a large number of functioning economies elsewhere in the world, that PMs will be of value, but if the entire world economy were to collapse it would be fairly useless?

I ask because that makes sense to me. It would give you a currency in which to setup a life in another country if need be. That was certainly the case with the countries you mentioned.
 

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Survival Nerd
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Discussion Starter · #20 ·
Can you argue this fact or are you still stuck on a "Fantasy SHTF" that has yet to happen since recorded history?
I'm not making an argument for one scenario or another ... nor am I stuck on any particular fantasy. The question was simply one of understanding why PMs retain value.

Your point is well taken, however. The likelihood of a world-wide economic collapse in which the entire world is reduced to a barter economy is very unlikely (which I agree with btw) .. and your point that eventually recovery will happen is also well taken.

As to Goose's reply, what I'm hearing is that the value of PM's is that they have value during a partial collapse as well as during economic recovery once a region is past just surviving and begins to moves on.
 
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