Sunday, March 13, 2022

It Depends On How Much S Actually HTF

With commodity prices racing higher, causing the specter of inflation to become even more prominent than it already was, there has been renewed interest in precious metals. Metals have long been a hedge against inflation for a variety of reasons, mostly because it is generally accepted that gold, silver and other precious metals have an intrinsic value. A dollar bill only has value insofar as we say it does. Otherwise it is just a rectangle of paper with some writing on it.

Precious metals are also something that might be useful in a civilizational collapse scenario. I included it in my post The Four Gs Of Investing In 2020 along with ground, guns and grub. It ought to be clear that I think that precious metals have a place in your preps for a variety of reasons (none of which ought to be construed as investment advice).

However there is often pushback from some folks when it comes to precious metals and it usually is some variation of "what good will silver or gold be if there is a total collapse?". The thought being that only items of practical, immediate utility will have any value. Who would trade food for an ounce of silver? Well that really depends on just how much shit actually hits the fan.


If we know anything for sure about what the general collapse will look like, what will precipitate it and what will replace the current order, it is that we actually know almost nothing. No one does. Sure we can speculate and that is fun but all of it is just conjecture.

There are of course various historical examples: Rhodesia, Rwanda, Yugoslavia, the break-up of the Soviet Union and Warsaw Pact, the fall of Rome. All are useful but none really are equivalent. The size and social complexity of America make our impeding collapse unique. 

How the collapse looks in western Nebraska is going to be far different compared to the collapse in Atlanta. Likewise, people living in the northern states will have a different set of problems than people living in the deep south or the southwest. 

My point being that we don't really know what to expect in a TEOTWAWKI scenario. That doesn't stop people from speculating on what will or won't be useful.

I often hear people say that precious metals will be useless in a collapse because people won't see the value or if they do they will simply try to take your stash by force. In some scenarios that is probably true. In others? It is completely inaccurate. 

There is a spectrum for how things might shake out, from a slowly developing situation where centralized control gradually collapses, leaving the U.S. as a vast territory of mostly autonomous zones, all the way to post-weapons of mass destruction annihilation of the vast majority of the country. 

If there is a general but mild breakdown, and the banking system becomes unreliable? People could very well be willing to trade some goods for silver, maybe not food but you need more than food to live a semi-normal life. What about a Balkanization, where the fiat currency of the U.S. no longer is legal tender? Just because we have had a particular system for what seems to be a long time doesn't mean it has always been that way nor that it will always stay that way. It was less than 89 years ago that President Franklin D. Roosevelt signed Executive Order 6102 banning the private ownership of any significant amounts of gold. Sort of sounds like Palpatine commanding the clones to execute order 66.


Government overreach didn't start with Obama.

In a SHTF scenario, barter will be important but precious metals have always had a place in less "advanced" systems. Understood in historical context, our modern economic system is an anomaly in human experience. For thousands of years before fiat currency, debit cards and checking accounts people still needed a way to transact business and one of the most accepted ways was to use precious metals as a medium of exchange. It was a better way to represent stored value of labor than showing up to buy something with a hopper wagon full of grain. 

For me silver is a smarter choice than gold. I can get over 75 one ounce silver coins at current spot prices for what I would have to pay for a single ounce of gold. Maybe gold is a better choice for investment but as a SHTF medium of exchange I think silver makes more sense. Not investment advice, et cetera. 

Of course as with all preps, you need to have any precious metal secured and you need to be prepared physically and mentally to protect it but that is true for precious metal or food storage or ammo or anything else you want to have and keep if the grid goes down.

If we are in a desert wasteland situation with roving warlords and Australian guys in souped up cars? Silver and gold won't be much use but you probably won't be alive anyway. I am focused on surviving in a setting where survival and eventual rebuilding is possible. If all you are doing is staying alive until you make a mistake and get eaten by cannibals, that isn't much of a life is it? The prospect of dying isn't that terrifying to me but rather what motivates me is protecting my family and the prospect of building something new from the ashes for the future. 

Because we just don't know how or when things will be down, it makes the task of preparing a lot harder. If I knew with certainty that the end would come in this way, at this time, in this place, my preps could be tailor-made for that scenario. But I don't, and you don't and none of the internet "experts" know either. 

So it becomes incumbent on the prepared citizen to have options and contingencies for a variety of scenarios. One of those options might be having a supply of precious metals on hand. While I wouldn't make it your primary prep, nor would I ignore it entirely. Life after it comes apart won't be like an 80s survivalist novel with endless gun fights, mostly it will be trying to recreate a semi-functioning society on a local scale.

The more you prepare for, the better your chances of surviving and thriving.

20 comments:

  1. If you read the series of articles by the guy who lived through the Bosnian/Serbian war money was meaningless. Ammo, food and water were essential, in that order. The series was really excellent. I highly recommend it if you can find it. Check the survival blogs.

    ReplyDelete
  2. My wife's brother-in-law is from Brazil and has middle-class friends in Venezuela because of, what else, soccer. As a prepper, I asked him to check with his friends about the "1 ounce of silver feeds a family of 5 for a month" claims that were all over the internet in the mid to late 20-teens. In every case, it was a pawnshop type trade where you sold your silver or gold for bolivars. Like here, you can't buy groceries or pay rent/mortgage with silver even in collapsed Venezuela.
    You raise a great point about survival fiction Arthur, and unfortunately, way too many people have used those stories as the basis for their preparedness plans. Believing the popular trope that you will be King of the Cul-de-sac with stacks of silver post-SHTF is as delusional as the chronically overweight and out of shape fantasizing about strapping on a backpack and walking 250 miles home post-EMP.

    ReplyDelete
  3. Nice article Art. When putting a plan together its all about contingencies and variables imho. We cannot cover them all, unless you have some real deep pockets. Silver was made my choice by my pockets. I have no idea how this shit show is gonna play out but PM’s might fill a gap in the time line somewhere along the way. I tell my tribe it will be a stone cold bitch, but in some ways we may be better off. We are pretty self sufficient now and most of the stuff we buy at the store we could probably do without any way. Just perks. Guess we will find out shortly. Good luck to all.

    ReplyDelete
  4. I've also started picking up.1oz copper bars as well. They can be used as small denominators as well and for other rapidly expanding uses

    ReplyDelete
    Replies
    1. I kind of wondered about stacking up a small amount of copper.

      Delete
    2. I don't know if I'd consider it a portent or whatever, but in addition to grains China has also been stockpiling copper.

      PMs are a store of wealth and means of exchange presuming some sort of functional marketplace. I don't imagine they'll be useful until after any sort of collapse and then minimal stability/restoration ensues, but a certain quantity may be worthwhile for that. As one youtube video I glanced at noted, throughout history there has never been a time (so far as we know) when one could not find someone who would be willing to buy/trade for PM. The question is, what would they be willing to trade for it and would it have any utility for you.

      Right now, with inflation soaring and the supply chain collapsing (funny how Putin-Hitler shrieking totally vanquished any stories about all the ships waiting to unload, although they're still out there) it's more rational to buy tangible things than to hold onto fiat currency, and there's only so much PM one can safely hold and/or transport.

      Everyone has his own lists among the standard categories (food/water/self defense/etc.) but it's also worth thinking further out. Personal example - we have land but as of yet no structure out there. We lack the space to store a proper wood-stove at our suburban home, so for an emergency we recently purchased a small wood burning stove (Hubby chose Winterwell stainless steel over the more expensive/lighter weight Pomoly titanium one) that can be used for camping (planning to add a wall tent shortly) or a small cabin or home. It's not ideal, but it's better than nothing and will be useful in other scenarios even if we do manage to build and move before it all falls apart.

      Delete
    3. I would get something out on that land, even just a mobile home, if funds permit. But depending on where you live even a large family camping tent would suffice for the short term.

      Delete
    4. Agreed. We've discussed numerous options. Husband is concerned about leaving a structure untended, since he does not yet feel able to financially leave his job and move to said land. I know, we need to get out of the city area sooner rather than later - and he knows too, but the eternal question of finances is always there - and we're significantly supplementing older son's salary so grandson can be raised at home rather than daycare.

      Delete
  5. It is worth considering that perhaps mighty, monolithic 'Murica is no longer the center of the human universe, and a crash/apocalypse here may not take the rest of the world down with it. Imagine the humiliation and horror if, say, Bangladesh or Rwanda were to step up and send humanitarian aid to us, in a perverse reversal of roles. Any other non-collapsed economy around the world would very likely welcome our silver and gold in exchange for a few necessities. Perhaps Our Greatest Ally would cough up a couple of shekels for their moribund creator.

    /sarc

    ReplyDelete
    Replies
    1. America going down takes the entire world with it. USA is something like 25% of the global GDP and like 1/3 of the food. And since we don't actually make anything anymore, all that demand disappears too. So all those places that do make things for Americans now have all these widgets that are useless. (nobody wants/needs/can afford)

      Delete
    2. I would agree with that. If we go down some places might be OK for a while, like ironically Russia, but the third world shitholes will be on fire in short order. Between starvation and disease without White people to step in there will be carnage unimaginable.

      Delete
  6. Excellent and thought-provoking post.

    It seems to me that any stockpiling approach to preps is a function of how long one thinks the "Road Warrior" situation goes on before people can once again feed themselves by normal agricultural efforts. Even an old geezer like me can hardly stock enough supplies to last the rest of my life, unless (as you alluded) that life is radically abbreviated by making a mistake in the presence of a bunch of headhunters. "Preparation" isn't a simple task, and requires some level of prediction of just what one is preparing for.

    As for whether to exchange Federal Reserve Notes for gold or silver, that seems pretty obvious. After TEOTWAWKI, people may or may not willingly exchange goods and services for precious metals; but it seems highly unlikely that they'll willingly trade for pictures of dead presidents on paper.

    Again, thanks for the thoughtful post.

    ReplyDelete
    Replies
    1. There isn't much point in staying alive if things are so far gone they won't come back. I can't feed my family indefinitely on what we have but I can keep them alive for long enough for things to stabilize.

      Delete
  7. food, meds and guns/ammo will be things of value after any event. and a few very good friends.
    you will need to get hard. remember this, trust is a lot like tp, works every well for what it is intended for, but if you ripped it to shreds, it not good for shit.

    ReplyDelete
  8. The problem I have with metals, is that most Americans have little of no experience with them.

    Most have never even seen a silver coin, let alone a gold one.

    Other than movies.

    I think most would have no idea what to do with it.

    Look on YT for that guy who offered silver dollar or a chocolate bar.

    Out of hundreds, only 2 took the silver.

    Do you trade a cow for a silver dollar or a $20 gold piece? That's worth only $20 dollars.(I really had someone say that!)

    And gold jewellery here in the US, basically is worthless.

    And then, you have to know how to tell the real from the fake.

    If you start shaving a guys gold piece, you may wind up getting smacked.

    ReplyDelete
  9. I'm still even today getting 10% of all pennies as pre-1982 ( 81 and before are copper. 82's can have some, or none, so I avoid all those ). Might as well take the effort, as it is below cost. Silver mining is on the decline. Silver should be 20 to 1 gold, historically. But with the mining and the discarding of electronics, you are probably looking at more like ten silver to one gold. I look at that alone as reason for $100+ silver ( in 2019 dollars ). Why not? Silver went up five times in less than twenty years, and not all of that is inflation. Of course, PM's are after you have years of food and thousands of rounds of ammo per weapon's class. As it should go without saying.

    ReplyDelete
  10. It is all in the size of the collapse. In most of them, gold and silver will rapidly regain value.

    ReplyDelete
  11. Food, then weapons, then ammo, then more food, then water, then pms.
    Silver has been my choice.
    Food includes ways to prepare it and serve it.
    weapons include spare parts and the skills required to both use and repair them
    pms require a way to verify they are what you think and a way to reliably weigh them

    ReplyDelete