Why Silver will be used Post-Collapse

(Before It's News)

Okay Everyone, I have been working my butt off to get a 3 part series podcast on the economy, how it works, why some things work and some don’t, basic economic terms and what they mean/importance, etc.  Precious metals were to be a section of that, why they are still “worth” something, why they always have been and always will be.  However after my post on Gold and Silver Coins and individual named Andy made a few comments, and we ended up in a back and forth disagreement over a few days!

Now Andy wasn’t necessarily wrong, he is right in that you can’t eat gold, and you can’t defend yourself with Silver, and that a 2000 lbs of long-term storable food is more valuable in a survival situation than $2000 in silver.  There are of course 100′s of unique scenarios and what if’s that can happen.

I want to go over a few misconceptions and “what if’s” as well as why I believe that in some ways the metals thing is overblown in the Prepper world, but also why it is also a very important aspect to have in the overall framework of your preps.

WHAT IF’S

There is this tendency in many preppers, myself included, and humanity in general to get stuck in a position, entrench yourself and then poke holes in ANY other possible scenario with the “what if” question.

WHAT IF THEY OUTLAW GOLD LIKE IN THE 1930′s?

This refers to Executive Order 6102 signed by President Franklin Delano Roosevelt in 1933 “forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States”.  Not to digress right away, but this is why executive orders are so dangerous to a free society, they allow a President to bypass Congress, when monetary policy and related issues are strictly a Congressional Legislative Issue.  Anyways, this is the big Boogeyman in the room when people talk about Gold and Silver in a Collapse scenario, that the Government MIGHT “Confiscate” all our metal.  Well folks there was a lot of shady stuff that went on after that executive order was signed, such as requiring people to sell it to the Fed at around $20 and once the alloted time was up Gold went up in price mysteriously, basically granting the government a pretty penny on their “investment”.  However a lot of rumors still abound today, such as the government seizing safety deposit boxes, searching homes, etc.  That never happened, it was strictly a voluntary (required) turn in, and as most Americans at that time trusted their government they did so. Many did not, and kept their gold and silver for a day when they would be able to openly sell it again or doing it secretly.  The IRS/Treasury, etc didn’t go after grandma Jones because she still had some $20 Gold pieces in her jewelry box, They didn’t prosecute people for not turning it in, except for one rare case of an Extremely wealthy individuals who had thousands of dollars (in today’s dollars hundreds of thousands of dollars) who tried to get around it.  I have yet to find ONE prosecution under this order.

If the U.S. Government tried to do this today, there would be even a smaller turn in percentage wise, than before, and regardless of the “FEMA camp” talk the government can’t intern hundreds of thousands of people for something as piddly as this, they don’t have the space or the manpower.

WHAT IF NO ONE WANTS TO TRADE FOR MY SILVER/GOLD?

Well that is always possible, but so is the possibility no one wants to trade for ammo, or food, or whatever.  Granted if everyone is starving and things are REALLY bad, yes you are probably right 99% of people are not going to want to trade their little food for your metals.  However things dont last like that forever or even a long time, the truly dire times.  People sadly, die off, food is produced, governments distribute food (or someone does in return for loyalty) whatever the case may be, things start to coalesce into a new normal, and starvation is real, but not constant.  Like i talked about in my Post on THE HISTORY OF MONEY , the early humans experienced this as well.  Once we became settled farmers we started to see an abundance, this abundance meant we had extra and could trade for things we needed and then things we WANTED.  This is when Gold and Silver came into the picture, they were pretty, could be made into pretty things and were not easy to find, thus had an intrinsic value to many people.

WHAT IF GOLD PRICES GO DOWN?

I’m sorry, but DUH! It’s a commodity, it has intrinsic value, but it like any other product/commodity, anything is subject to market fluctuations, and it will go down as well as go up.  Overall the price will continue to climb up as the economy weakens, and other factors of lessening US economic importance come into play.  However If you haven’t done a lot of research and are looking to “buy low sell high” you are going to get hurt.  This is a long-term investment, don’t even look at prices if you aren’t looking to buy and don’t look to sell unless it’s absolutely necessary.

WHAT IF_____?

Ok so now I hope you understand why a few of the common “What if’s” are not well founded, but also…There is a what if for any situation.  Why Prep? What if nothing goes wrong? Now of course that isnt going to happen even if nothing “big” worldwide goes wrong, chances are SOMETHING will go wrong in your life or area at some point in your whole lifetime.  Why do anything because there is always a scenario where things could go wrong or negate your preparation.  Why Store away food, people could take it. Why store food, rats could get into it. Why build a homestead, it could burn to the ground.  Why keep breathing, you could have a heart attack.  Now that last one was a little extreme, but I made my point.

WHY BUY PRECIOUS METALS

The Big question, WHY? Well because it’s a prudent measure.  Like I said in the first paragraph, to be fair to Andy he is right, A starving person will not trade food for silver or gold, because that would be stupid! Would you? However we can’t entrench ourselves into this mentality that just because things WILL get bad, that they will ALWAYS be bad, that  bad scenario means people are starving or that even if they are that MOST will be starving for years and years and years.  Even in this worst case scenario, total anarchy, road warrior, book of Eli stuff, People rebuild.  If history has taught us anything is that humans are a VERY resourceful group. We always rebuild.  When that happens excess appears on the traded markets, excess equals wants, wants equals symbols of wealth.  Also those that travel and trade also need some form of compact wealth to trade and do business without having to haul thousands of animal pelts, or the like, they want something that holds a lot of value in a small form, that is precious metals.  This is for worst case scenarios, the absolute worst, i.e. back to 18th century America Bad.

In a more likely scenario of a collapse or partial collapse of the world and US financial system, you will see a worse repeat of the depression.  Food prices will skyrocket, more people will be out of work, more government regulations and “clamp downs” on crime.  However most people will still be working, however making less, relatively, to what they did before.  Our economy will start to mirror many economies around the world.  The basics and staples will be available, but expensive and underground economies (sometimes referred to as “black markets” by governments who try to make them look evil because they can’t tax them) will start to form.  Barter will be used more to get around taxes as well as to trade value for value.  Andy is right in this in that most people will barter on a small-scale rice for meat, boots for bread, etc.  However people will, always have and always will, take silver and gold for items, because, well other people will.  He may not wish to, that is his choice and prerogative, however that doesn’t change historical fact.  You will meet people who will take it, as well as those that wont take it.

“The Collapse” is always preceded by a period of instability.  The collapse itself is not the “wake up and its all over” event, its the slow, or fast inflation of the prices due to devaluation of the value of the currency and the collapse of systems we have come to rely on.  During this period, which will last MUCH longer than the period of “anarchy” between governance periods will be when you do the lions share of your barter and start using, dipping into or trading your preps.  The dollar will still be used but will be worth less every day, and prices will go up, this may or may not be hyperinflation.  I have never said DON’T BUY FOOD BUY SILVER!  I have always said make it a PART of your preps, if you have your preps pretty well handled, or as well as can be and you still have disposable income, whatever you don’t need for bills and mortgage payments I would personally put into metals.  Why? Because like I’ve said they continue to hold their value while the dollar drops.  That silver coin your granddaddy got in 1920 still has the same value today as it did now, the 1 dollar bill, does not.  So this is a Silver instead of cash prep thing, not a silver instead of food prep thing.  You need to have cash available to pay bills and I’m not talking about cashing in your 401k’s to buy silver or gold either.  That decision is up to you, and it would be idiotic to have no cash and all silver because come the end of the month bills need to be paid and they probably don’t take metals!  However during this period of price inflation that 20 dollar bill will buy less and less of the food you need, while those silver dollars will continue to buy the same amount as they did before the collapse really takes effect (relatively).  In Andy’s case he has (from what i gathered) decent food preps, etc.  However why would you want to dip into those if you don’t have to? having some silver and gold will allow you to cash it in and buy the same amount of food as before this.  You can still go to the store buy the beans, rice and veggies in a can like you used to and save the food preps for the truly dire times.

Silver and Gold will be of some use during a collapse but not as much as AFTER the fact.  I keep harping on this as a long-term investment, because of this.  Yes it can be used for trade in some or many circumstances DURING a collapse, depending on the scenario and circumstances of your area.  However after is where it really starts to pay off and benefit you.  During a collapse the current currency will be devalued, and may even disappear for a time.  After that a new currency will appear, or the old one may reappear but be rebased (That can be a number of things, it could be rebased back on metals, wholly or partially or on say grain production or with a cap on total amount in circulation, etc.).  When this rebasing happens the old currency will be exchanged for a much reduced rate, say 10-1 or even 100-1 or a everyone gets 2000 of the new bills, etc.  So either way you split it your old bills will be worth MUCH MUCH LESS than before and you probably spent them already during the collapse at even higher rates for items of necessity.  Gold and Silver will still be highly valued because they always are when currencies are being hit hard or are suspect. That is, if the dollar is sliding down the toilet, gold goes up, if the dollar is doing well gold goes down (generally speaking, there are other factors, but 95% of the time this holds true).  If a new currency is introduced, especially after a collapse, people will not very confident in the new currency, thus metals will still hold its value or still continue to trend up.

If you have a GOOD amount of preps and years of food for you, your family, etc. and instead buy another 3 years of food, that will be of use in barter situation, but when things start to get better, farming picks up, etc. now your preps that were once worth their weight in gold literally are now worth significantly less.  People have better access to food now, so they don’t want to pay the big bucks for your buckets anymore.  This is a  good thing overall, but this is where having gold and silver come into play, they hold their value, and will always be worth something.  It doesn’t matter if you wouldn’t trade for it, or that you don’t care about silver or gold, and think that is worthless personally or philosophically.  Bartering and trade, economics and supply and demand don’t care about what you think or what you think is true, it’s about society as a whole.  Historically this is true, and as much as we like to think that the collapse of America will be “completely different” it’s not, it has happened before and will happen again in the future.  Me pushing you to buy it doesn’t make me a penny, in fact it COSTS me money, because my time spent writing these blogs and running this site, costs me money.  I do it because it’s the right move, it’s betting against a dying currency, its hedging for a mathematically necessary collapse and preparing for the recovery and rebuilding that comes afterword.

In the end its up to you, and your own decision, however if you look at other countries and societies that have collapsed, from thousands of years ago to those in the middle of it now, the lessons are the same.  We don’t get to escape it just because we have a red white and blue flag, or because we have a beautifully crafted constitution that we’ve ignored, or because we’ve been to the moon.  Mankind will be mankind, we continue to make the same mistakes, the same mistakes result in the same consequences and the reality is after the consequences come to pass the same basic principles and foundations are necessary for thigns to be rebuilt. And rebuilding is as guaranteed as the collapse.

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