# Why gold, silver and metals?



## allyn211 (Mar 3, 2012)

I'm good at figuring out types of supplies to get, but one thing I don't understand is this: Why do people say it's so important to invest in gold, silver and precious metals?


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## k0xxx (Oct 27, 2011)

Precious metals, at least for me, are a way to carry my "wealth" through an event where the currency may loose it's value. If we suffer through something on the lines of an economic collapse, cash would most likely become worthless. Once the economy has stabilized, PM's can be sold for whatever currency is being accepted.

During the Depression, a lot of rural folks had food, thanks to gardens and livestock, but they had no cash to pay their property taxes and a lot of them lost their homes because of it. Having stored PM's, I can go into the city and sell a few ounces of silver, and pay my yearly property taxes.

There are those that feel that PM's may have some value in a barter based economy. While that may very well be true, once events have stabilized, my primary reason for PM's is preserving wealth.


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## BillS (May 30, 2011)

Precious metals also protect you during hyperinflation. I expect hyperinflation in the US before the collapse. If prices go up 10,000% then precious metals will do the same or more. One example today is the ratio between the value of 90% silver dimes and gasoline. Back in 1960 you could buy one gallon of gas with two dimes, approximately. Today, two 1960 silver dimes are worth about $4.80 which is more than enough to buy one gallon of gas in most places.


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## The_Blob (Dec 24, 2008)

and silver (aka 'poor man's gold') is actually outperforming gold in terms of growth, I've shifted much of my gold to silver hoping that the silver ratio will restabilize at the historic 17-to-1 (currently 51-to-1), then I will reshift back to a more balanced PM portfolio...


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## johnyharman (Apr 28, 2012)

Gold, Silver and other metals are very useful in now-a-days technology, Especially in electronics field. Some of these metals are found from the earth's surface, used as coins at the beginning of money. Gold is outstanding ductile and malleable and able to be drawn into wires thinner than a hair and beaten into sheets thin enough to transmit light. Silver has excellent uniform reflectivity and so was preferred for mirrors. Most of the people likes gold and silver are the tangible asset that will retain its value even if paper currency loses its value.


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## gatorglockman (Sep 9, 2011)

I am just wading into this slice of prep. I made some strong strides in my food and firearm preps over the past 2 years and got to a point where I needed to pause and assess my total prep strengths and weaknesses. I realized that having PM's as a portion of my prep and investment plan (not the end all beat all....I still believe in the 401k and other means to grow money) was probably a smart move.

Silver is at a good point right now and at a price where I feel assuming some risk is not too crazy and a good way to get in and learn. I think silver will be more of an investment vs a barter item personally.

I have 1 kid in college and another getting ready to go....so buying gold bullion is not an option for my financial status at this time....silver is a lot easier to collect.


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## tac803 (Nov 21, 2010)

Paper money is only valuable since people believe it has value. The paper and ink have no intrinsic value, and once people's faith in the currency is shaken, it loses it's buying power. On the other hand, silver and gold have always held value in society, going back to ancient times.


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## mosquitomountainman (Jan 25, 2010)

PM's are okay as a part of your preps. In an initial SHTF phase, PM's may not have a lot of value so you want to be absolutely sure that you have enough supplies stocked up to carry you through. Otherwise you may find yourself trying to trade a bucket full of silver for five pounds of potatoes or a box of bullets. If you're the person with the extra spuds or ammo you'll be the one getting the bucket full of silver. 

So, cover the things you need to survive first (which may include enough PM's to keep your taxes paid). After that turn more attention to PM's. 

Just remember, if you and your family is cold, starving and afraid, who would you want to see coming ... the guy with a truck load of silver or the guy with a truck load of food, firearms and building supplies? Be that guy.

Also: Using PM's as a hedge against inflation is okay but remember that the necessities will climb in value as quickly as PM's. So, the five pounds of potatoes will also rise in value as inflation increases so by having supplies on hand you've also built yourself a hedge against inflation.


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## BillS (May 30, 2011)

gatorglockman said:


> I am just wading into this slice of prep. I made some strong strides in my food and firearm preps over the past 2 years and got to a point where I needed to pause and assess my total prep strengths and weaknesses. I realized that having PM's as a portion of my prep and investment plan (not the end all beat all....I still believe in the 401k and other means to grow money) was probably a smart move.
> 
> Silver is at a good point right now and at a price where I feel assuming some risk is not too crazy and a good way to get in and learn. I think silver will be more of an investment vs a barter item personally.
> 
> I have 1 kid in college and another getting ready to go....so buying gold bullion is not an option for my financial status at this time....silver is a lot easier to collect.


If it was me I wouldn't have any investments except in PMs. I think we're going to see the collapse of the dollar because it will lose its status as the world's reserve currency. So many countries have recently made agreements with each other to trade in their own currencies. The last straw for the dollar could be when the Fed announces the next installment of QE.


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## gatorglockman (Sep 9, 2011)

BillS said:


> If it was me I wouldn't have any investments except in PMs. I think we're going to see the collapse of the dollar because it will lose its status as the world's reserve currency. So many countries have recently made agreements with each other to trade in their own currencies. The last straw for the dollar could be when the Fed announces the next installment of QE.


Understood. I can't divest out of my 401 unless I quit my job, and I won't do that. I am looking at some alternate strategies such as investments in land, PM and other things.


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## allyn211 (Mar 3, 2012)

The_Blob said:


> and silver (aka 'poor man's gold') is actually outperforming gold in terms of growth, I've shifted much of my gold to silver hoping that the silver ratio will restabilize at the historic 17-to-1 (currently 51-to-1), then I will reshift back to a more balanced PM portfolio...


OT, Blob: I actually prefer the T-Shirt that says, Come over to the dark side. We have chocolate.


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## SuspectZero (Feb 3, 2011)

As most have said its not an investment its a hedge against inflation and wealth preservation. E.i. you could buy a gallon of gas for .10 45 or so years ago (when silver was in coins). Now silver dimes will basically buy a gallon of gas. It stays consistent with the value of outher commodities. Now if we ever went back to the gold standard, by law, silver would have to be a 1:16 ratio. Essentially tripling silver over night. I buy it to diversify and protect against my losses in my 401k. Land is also a good investment if your plan on using it or reselling it as the market comes back up. My wife and I bought some in Brazil (where her family resides) and have come out way ahead as thier economy is booming compared to ours right now.


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## mosquitomountainman (Jan 25, 2010)

BillS said:


> If it was me I wouldn't have any investments except in PMs. I think we're going to see the collapse of the dollar because it will lose its status as the world's reserve currency. So many countries have recently made agreements with each other to trade in their own currencies. The last straw for the dollar could be when the Fed announces the next installment of QE.


If you're thinking of PM's as a hedge against inflation them PM's make sense. However I expand the term when a person speaks of "investments." Rather than see it as a one sided issue relating to money in it's various forms it makes more sense from a prepper standpoint to see it as a general term toward what you're doing to prepare for an uncertain future. In this case investment could include learning barterable skills that would be useful in the case of economic collapse. It would include storing essentials such as food, firearms and ammmo, having a place to live in comfort and generally insuring your physical well-being no matter what may happen. PM's would be a portion of a good prepper's investment strategy *but only a portion of it*.

In a severe crisis you're going to look out for your own well-being first. If food is in short supply and you only have enough to insure your own (or your family's) survival you wouldn't sell a loaf of bread for a truckload of silver or gold. Quite frankly, the person who invested only in PM's will face starvation or death when no one wants to sell their *real wealth*. A well-balanced prepper will not be in that position because they'll have the basics taken care of. They won't be begging someone to take ten pounds of (at that point, virtually useless) gold in trade for a loaf of bread. Their family will have food, shelter, and security.

True, PM's generally hold their value during inflation but cash of any form isn't worth much if no one is willing to sell! ALWAYS take care of your basic needs FIRST! PM's are fine in civilized society. In subsistence society PM's are absolutely worthless. (Think of how little the American Indian valued gold prior to the coming of the Europeans.)

Investing in land/property is not a hedge against inflation. Take a quick look around to confirm that. Lots of people are sitting on land that is not worth what they bought it for. Eventually it may recover it's value but then again, maybe not! In a real SHTF situation we may be back to the point in which a piece of paper proving ownership is worthless. It could come down to whether or not you can keep possession by force. Are you prepared for that? Again, PM's aren't going to help you much. If you use them to buy mercenaries they could just as well turn on you and take your gold.

Real, long term investments mean you have your food, shelter and security covered. Those are the basics of life. Without them you are at the mercy of those who do have them.

I'm not against a person acquiring PM's as *part* of their "investment" strategy. The person who puts PM's ahead of the basics however, is like the person on the Titanic who realized that the ship was sinking and all the lifeboats were already gone. When TSHTF it'll be too late for them. The only thing good about it in their case was that they didn't have a long time to mull over their foolishness. You may not be so fortunate!

The wise investor is the one who covers _*all*_ of the bases.

Cheers

Steve


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## BillS (May 30, 2011)

The Indians didn't value gold but that's because they didn't know what could be done with it. They mined turquoise for thousands of years so they obviously valued jewelry. It was something they would've traded to other tribes.

Of course it's good to have marketable skills. I never said it wasn't. Of course you should buy enough food. I never said you shouldn't. You should buy guns and ammo too. I continue to see an almost irrational opposition to owning PMs. I think people see their value but then criticize them because they can't afford them.


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## BillS (May 30, 2011)

gatorglockman said:


> Understood. I can't divest out of my 401 unless I quit my job, and I won't do that. I am looking at some alternate strategies such as investments in land, PM and other things.


We took out a 401k loan to buy gold and silver.


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## Magus (Dec 1, 2008)

Were you out of debt up until that point? I can see the logic under current situations you stand to rake in some serious cash, I also realize that if SHTF the debt would likely go poof
BUT after SHTF Wouldn't actual supplies serve you better? Only a moron would trade his food or equipment for useless coins, BUT then again, the world is full of fools.I wish you well in your strategy, but I feel it will end badly.

Dave Ramsey would not approve BillS.


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## Tweto (Nov 26, 2011)

double post sorry


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## Tweto (Nov 26, 2011)

BillS said:


> We took out a 401k loan to buy gold and silver.


I know several people that have borrowed against their 401K's and over time everyone of them said it was the stupidest thing they have ever done. A few of them thought that they would have years to pay it back and then were layed off and had 30 days to pay it back.

Bad idea!


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## The_Blob (Dec 24, 2008)

Tweto said:


> I know several people that have borrowed against their 401K's and over time everyone of them said it was the stupidest thing they have ever done. A few of them thought that they would have years to pay it back and then were layed off and had 30 days to pay it back.
> 
> Bad idea!


not flaming you, but your friends obviously had NO idea how a 401(k) works, they could EASILY have transferred it (and the loan) to either a solo OR a 'self-employed' (small business) 401(k) within that 30 days and given themselves some breathing room (as long as they could still make the payments, which are usually less than a comparable loan from a lending institution). If they weren't able to make the payments they were screwed long before they ever lost their jobs and just didn't know it.

on a side note:

If a business reports a net profit in at least 3 out of 5 years, it is presumed to be a for-profit business. If a business reports a net loss in more than 2 out of 5 years, it is presumed to be a not-for-profit hobby.

The IRS *expects* new businesses to incur a loss. It is normal for a business to have a year or two of losses before becoming profitable. But if you cannot meet the 3-out-of-5 year 'rule' (3 years of profits in a 5-year period), then you are really a prime candidate for an IRS audit where you would have to prove your profit motive.

You can still prove your profit motive using the following nine factors: 
You carry on the activity in a businesslike manner, 
The time and effort you put into the activity indicate you intend to make it profitable, 
You depend on income from the activity for your livelihood, 
Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business), 
You change your methods of operation in an attempt to improve profitability, 
You, or your advisors, have the knowledge needed to carry on the activity as a successful business, 
You were successful in making a profit in similar activities in the past, 
The activity makes a profit in some years, and how much profit it makes, and 
you can expect to make a future profit from the appreciation of the assets used in the activity.

There is no actual rule on how many years you can actually claim a loss. You just need to keep in mind that the longer you continue to report losses, the more likely it is you will be audited and you need to be prepared to prove your profit motives based on the above factors.


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## mosquitomountainman (Jan 25, 2010)

BillS said:


> The Indians didn't value gold but that's because they didn't know what could be done with it. They mined turquoise for thousands of years so they obviously valued jewelry. It was something they would've traded to other tribes.
> 
> Of course it's good to have marketable skills. I never said it wasn't. Of course you should buy enough food. I never said you shouldn't. You should buy guns and ammo too. I continue to see an almost irrational opposition to owning PMs. I think people see their value but then criticize them because they can't afford them.


Please read what I actually wrote: "I'm not against a person acquiring PM's as part of their "investment" strategy. The person who puts PM's ahead of the basics however, is like the person on the Titanic who realized that the ship was sinking and all the lifeboats were already gone. When TSHTF it'll be too late for them. The only thing good about it in their case was that they didn't have a long time to mull over their foolishness. You may not be so fortunate!

*The wise investor is the one who covers all of the bases*."

There's no opposition to owning PM's. The point is that PM's are usefull only to the extent that they can provide for our needs. Once our needs are taken care of then PM's make a lot of sense.

If a person has all of his needs covered but doesn't have any PM's he's still going to be well fed, sheltered and secure. (Which may be far more than the guy with a bucket full of gold but nothing else.)

Just so you know, we have a modest amount of PM's stashed away but we are also completely debt free, own our land, grow our food and heat our home with locally cut firewood. We both have highly marketable/barterable skills usefull in both pre and post collapse society. The fact that we are not putting up vast amounts of PM's says nothing about our ability to do so but says much about the value we place on the senseless accumulation of, worship of, and reliance upon money.

Our pantry is full ... the price of groceries do not negatively affect us. Our home is warm and tight ... the price of heating fuel does not affect us. Our power comes from our solar panels ... we are not affected by rises in energy prices. Our property is paid for free and clear. The only "bills we have are the phone/internet, liability insurance on the vehicle we are driving and the annual property taxes.

PM's do not equal security. Get the important things first then concentrate on accumulating money. Don't get your undies in a knot. PM's are not a bad investment unless it's an investment made at the expense of real security.

Cheers

Steve


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## mojo4 (Feb 19, 2012)

I actually had a pretty good chat with my dad about this. Gold dropped and he said we should buy. My point is that just like in every other business buy low and sell high. So what can you get now that's cheap that you can sell or trade after a collapse. My opinion was to buy spare guns and ammo and booze. 1 gold ounce is around 1600. For 1600 I can get a sweet AR and 2000 rounds of ammo. After a collapse, I would trade that same setup for a bag of gold. Much better investment IMHO.


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## k0xxx (Oct 27, 2011)

Putting back PM's seems to be a matter of severity. If you believe that things will fall apart to the point of warring tribes and Mad Max raiders, then PM's don't hold any value for you. However, if you feel that it will be more like a prolonged depression or the other examples of economic collapse (think Argentina), then putting back PM's starts to make sense. To each his own.

Some of us have been prepping for a long time, and it has become a way of life. As for myself, I started back in the very early 80's. I don't need anymore guns, bullets, and food stores. I live in a three bedroom home, and only one bedroom is used for sleeping. The place is paid off, we have alternative fuels/power, we currently produce 90% of our food and that could easily be near 100% if we could grow coffee for me and chocolate for the wife. I am still buying PM's because I believe that the economy will go south, and even though I'm old enough that I will probably not see us come out the other side of it, my children may. As others, Over the years I have found that *most* of those that dump on owning PM's as a part of one's strategy, are those that are either unschooled in history or do not have their preps to the point where they can afford to. YMMV


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## BillS (May 30, 2011)

mojo4 said:


> I actually had a pretty good chat with my dad about this. Gold dropped and he said we should buy. My point is that just like in every other business buy low and sell high. So what can you get now that's cheap that you can sell or trade after a collapse. My opinion was to buy spare guns and ammo and booze. 1 gold ounce is around 1600. For 1600 I can get a sweet AR and 2000 rounds of ammo. After a collapse, I would trade that same setup for a bag of gold. Much better investment IMHO.


I already have enough guns and ammo. I can bug out pretty easily with that one ounce of gold compared to an extra gun and and an extra 2000 rounds of ammo that I don't need. I could sell it online tomorrow if I needed the money. Good luck trying to resell that gun and the 2000 rounds of ammo quickly and do so without being noticed by law enforcement.

The collapse isn't going to last forever. At some point SOME government will gain control of the country if the US government doesn't regain control. PMs will be a liquid store of wealth that's portable compared to a gun and 2000 rounds of ammo.

You also have to look at it from a barter standpoint. I would rather buy a horse from a guy for one gold coin or a bunch of silver coins than give him a gun and 2000 rounds of ammo.

Besides, hyperinflation is a 100% certainty. The dollar will be worthless in a few short years if not a lot sooner than that. The Federal Reserve has created at least $2 trillion in bogus dollars with still more to come. The dollar will lose its status as the world's reserve currency. No matter what happens to the value of the dollar I can still sell my precious metals and buy food and gasoline. I won't have to start eating my stored food just because a loaf of bread now costs $20 and a gallon of gas now costs $40. $1000 worth of silver today will still buy an equivalent of $1000 worth of stuff in the future regardless of what they end up costing in dollars.

Gold and silver are bargains right now. I expect gold and silver to soar due to panic buying when everyone realizes that the dollar is going to become worthless. That's not why I own them but it's something else to consider given how both gold and silver have lost money following their recent highs.


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## Magus (Dec 1, 2008)

O.K, I'll bite. you might have a decent idea, but how do you intend to make change? bolt cutters or a hammer and chisel?


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## flhtquick (Dec 7, 2009)

90% silver dimes quarters and halfs


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## BillS (May 30, 2011)

Magus said:


> O.K, I'll bite. you might have a decent idea, but how do you intend to make change? bolt cutters or a hammer and chisel?


You have the same problem using ammo as money. Do you round to the nearest round or do you cut it in half?


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## BillS (May 30, 2011)

flhtquick said:


> 90% silver dimes quarters and halfs


I like dimes the most since they're the smallest silver denomination. A 90% silver dime is worth about $2, a quarter about $5, and a half dollar about $10.

http://www.coinflation.com/


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## Magus (Dec 1, 2008)

BillS said:


> You have the same problem using ammo as money. Do you round to the nearest round or do you cut it in half?


Perhaps so.I had a dream once where I popped the clip out of a mini 14 and shucked out 5 shells for 4 pimento cheese sandwiches and 2 sodas.could happen, but was only a dream.but still.the guy has a pound of fresh pork say priced at 1/32nd of an ounce worth wise, you have one Maple leaf.we have issues.

Now a smart man, [and I figure you are.] would have stored various sizes down to those pendant sized 1/10th oz coins. a dumb man travels with his bolt cutters and postage scale.But I imagine you have scales anyway and maybe a portable acid block for testing.but that's moot at the moment.how to make change?Melt it down to #8 buckshot sized nuggets?anyone who knows you wouldn't bat an eye, its gold after all.
Someone you don't know will balk unless you can prove your goods.


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## BillM (Dec 29, 2010)

*Making change*



Magus said:


> O.K, I'll bite. you might have a decent idea, but how do you intend to make change? bolt cutters or a hammer and chisel?


Twice in American History paper money has become worthless.

During the American revolution, the Conential was the momitary unit adoped be the thirteen colonys. By the end of the revolution, they had printed so many Conentials that a wagon load would not buy a loaf of bread. Ever hear the saying, "not worth a Conential"?

Every one wanted payment in silver . The Spanish Dollar, ( also known as a Dubloon or a peice of eight), was the prefered currency. It was pure silver and had a specific weight.

To make change , it was common to take a chisel and cut a peice of eight into eight equal peices which were then refered to as "Bits"

"Shave and a hair cut , two bits"

When the U S Goverment decided to replace the failed Conential, they decided to call the new unit of U S currency a Dollar because the Spanish dollar was a familiar and accepted unit of currency already.

West of the mountians in the fronteer, there was little silver to trade with and the unit of trade was a deer skin. One deer hide was worth a silver dollar.

This is where the term a "Buck" or got any "Doe" came from.

So the answer to your original question is yes, you can cut it with a chisel to make change.

:2thumb:


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## Magus (Dec 1, 2008)

I'd rather just make gold buckshot myself. LOL


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## mojo4 (Feb 19, 2012)

Well at least if you cut up a gold piece you will know for sure if its just painted lead If there is a collapse will companies just start accepting silver?? Trading with individuals is one thing but most stores are corporate owned and gotta answer to the man!!


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## Zonation (May 4, 2012)

BillS said:


> We took out a 401k loan to buy gold and silver.


Very smart Bills. Land is key...and of course silver and gold.


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## nikewillson (Jul 17, 2012)

Investment in Gold has become one of the best methods of savings now a days, As the value and price for the gold has becoming more and reaching a level which the normal man cannot reach even.The investment in gold will be an asset in times when the money is required , There are many gold bureau's in my area, which deals with the gold and silver items, the if prices and the jewelery form various countries and with various models in our area. I am currently investing the money in gold.


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