Disasters

Metals will only be good after some type of organized society forms again. If 99% of the poplulation is wiped out I dobut metals will be that valuable, they will be relatively plentiful at that point.

 

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You're right on this SilverSurfer. Rono has touched on this too.

In the event of a truly global catastrophy resulting in the complete breakdown of economies and society, PM's become somewhat irrelevant. Barter, subsistence living and violence would likely rule. This is not my outlook but I'm following your scenario and agree with your conclusion. I think it is within the realm of possibility that we will eventually endure economic hardship in which silver, gold and positions in other commodity classes will be very valuable indeed. Good friends and an abiding faith are of high value in any scenario.

Regards,

Bluesboy65

 

I see forms of exchange, such as gold or silver, not mattering in only two scenarios.

First, you have the immediate aftermath of some sort of disaster where disorder and survival rule the day. If you are floating on your roof with a bottle of water out at sea for 9 days who cares how much gold the guy who floats up to you on his roof has. You are not selling your bottle of water.

Second, a true apocalypse such as the sun going supernova where there simply is no tomorrow and these questions don’t really matter any more.

Otherwise, I think people who argue that money, in whatever form, will become meaningless after the so called “shtf” need to step back, examine the historical record and think a little about human nature.

Rome collapsed in a series of barbaric invasions, did money become useless? Europe and much of the world was struck by the bubonic plague, did money become useless? Sarajevo was under siege for years, did money become useless? People, and they always exist, who have more than they can use or somehow attain some power through thuggery or legitimate means, will not be interested in bartering with thousands of people for thousands of goods. They will want a medium of exchange.

When the situation is one like Sarajevo in Bosnia, very apocalyptic in the specific place, but the rest of the world pretty much going on as usual, foreign currencies usually fill the role. If the situation was somewhat more widespread and pieces of paper were simply not wanted then certainly precious metals would fill the role. A role they have filled for centuries, a role they seem destined to fill whether reasonable or not. People seem to have the expectation that if fiat currencies fail you have gold and silver to turn to. There has been a lot written about what metals have been chosen for money and why, I won’t go into that.

Anyway, my point is that even when the “shtf” a medium of exchange will eventually be necessary, and I probably sooner rather than later. Bartering always exists, it exists even today, and it is probably fair to say that in a crisis situation bartering may make up a greater proportion of transactions than it does now. But any assertion that an extended period of time would be dominated by barter, and only barter, is really not likely. History, human nature, practical necessity all counsel against such a conclusion. (IMIAO of course.)

 

History has shown us that PMs have in troubled times given people opportunity when things get back to normal. I agree when a crises happens that jug of water , food , and what ever you may have to protect yourself for the time being is worth more than it's weight in gold. But when things get better the one holding the silver, and gold will be ahead of the game. Look at the Europeans who immigrated from Europe post WW2 , the ones who had the PMs and or diamonds had the opportunity to start a business, those that did not, worked for the ones who had it. As far as running with a bag of gold, heck just bury it and get it later. Just my two cents.

 

Ravisaurus, very well stated and I really like the historic context! Agree! :thumb:

 

Yep, the perfect point(s)! Well said. And my thinking exactly.

Lucy

 

In post-WWII Europe, so badly collapsed that starvation was threatening, there was still a medium of exchange. It was cigarettes, not gold, but it shows that a disaster has to be really bad before people give up on any kind of money. In an economic disaster, like the ones Ravisaurus pointed out, moneychangers may emerge as they did in ex-Yugoslavia. One of those might well be interested in accumulating gold for later, and would trade you cigarettes or foreign currency or whatever was in widespread use in exchange for precious metals.

 

It seems to me that in such situations, using gold or silver to "buy" things is still just a form of barter, since each person will have to value the PM at what they think is fair for themselves, whichever side of the transaction they are on.

 

Nice post. I often see people argue against precious metals using the logic that nothing will hold value in a Mad Max type situation. Search "Zimbabwe gold for bread" to see what happens when the economic SHTF.

Sure, if we have some sort of apocolyptic situation like a global nuclear war, then survival will be the ONLY thing that matters. Water, food, and guns will be hoarded and won't be sold for any amount of gold/silver. But even in that situation, a few ounces of gold may pay your way onto the boat to the Galapagos.

Most people who hold a significant percentage of their wealth in precous metals also have food supplies, access to a well, guns, and ammunition. They have prepared for the survival portion of the S. Hitting T. F. and are looking for a way to preserve the extra wealth they've accumulated in US Dollars. Once things settle down, gold and silver WILL have value and there will be people with food/water for sale who will take them.

I hope I'm wrong in this prediction as my standard of living comes down significantly if I'm right, but I think the US Dollar is already toast. At some point in the relatively near future, this will become obvious to everyone and the collapse will happen very quickly after that. Any savings held in Dollars will become worthless. Whether you have $1,000 saved or $10,000,000 saved. Everyone will be looking to sell their dollars at the same time and no one will give up anything of value for them. There will be a difficult transition as less than 5% of our population has the skills and resources necessary to obtain their basic needs without dollars and grocery stores.

I am optimistic, however. We have a strong infrastructure in place and knowledge is passed around this country freely and easily. The Government will not be able to continue giving away the vast socialist services it currently provides, but I hope they can MAINTAIN PEACE. When you break it down, that is all we really need from a Government. Protection from those internal and external who look to take from us via force. Allow everyone to live free and make the most of their abilities. Some will perish as they are unable to work and to obtain the basics (see Zimbabwe gold for bread), but that is survival of the fittest. Much like deficit spending, you can only manipulate things so long before the basic laws of nature/markets/economics snap back.

There is also the realistic chance that things won't get to a SHTF situation. Our problems are largely economic, related to US Treasury Debt/US Dollars. We may only see a devaluation of our currency, which allows us to break free of our debts/socialist liabilities. Buying PMs today and trading them for the new currency will protect you against the devaluation.