# Best precious metals (PMs) for different scenarios.



## Tacitus

*Economic downturn/difficulty* (some banks closed, others open...maybe most of them open): Any PM, from junk silver coins, to full ounce gold and silver coins of any type/source, and even gold and silver bars. Open trade on PMs remains.

*Economic disaster*, ranging from sovereign debt defaults, to hyperinflation, to absence of the rule of law (e.g., EMP aftermath): Anything which is unfamiliar will be worth less (perhaps much less) than the familiar:

Good: PMs recognizable as being from a trusted (at least formerly trusted) authority
junk national silver coins;
national mint PM coins

Questionable: anything not from an immediately recognizable source will be discounted (possibly significantly) by the person accepting the PM (assuming there is a market for them)
private mint coins
special occasion / commemorative coins
exotic/uncommon national mint coins (e.g., Austrian gold coins in the United States; Krugerrands used to be very well known in the US, but the upcoming adult generation may have never even heard of them)
bullion bars


These are just my thoughts. I post to invite others to comment upon, and critique, my thoughts.


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## BillS

I think you have to divide economic disaster into different types. As long as the electrical grid is up and businesses remain open then all types of PM's will maintain their value. Gold and silver bars might be difficult to sell to local dealers. I think they're too easily counterfeited.

I think once the grid goes down, gold and silver bars will be viewed with a lot of skepticism.

I don't like most foreign coins. The only ones I like are gold and silver Canadian Maple Leafs. They have 99.99% purity and they're sold by weight. The design is very similar to a Canadian dime. I think almost everyone would be OK accepting them.

I think it's important to have enough small coins to have proper liquidity. I wouldn't want $10,000 in just 1 oz gold coins. That could be a problem. I started out buying junk silver. Most of my junk silver is in dimes. Some in quarters. After awhile I added a number of 1/10 oz gold coins and a number of 1 oz silver coins. I think the more money you put into PM's the more large coins you need.


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## bigg777

No matter the scenario, pre-1965 90% silver U.S. coins will always retain viability as a medium of known quality and exchange. Even if S never HTF, they will always be recognized for their known silver content.

These coins aren't shiny and sexy, they're E-series U.S. savings bond of the PM world, they just keep going up in value.


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## worldengineer

When it comes to PM's in any SHTF situation I will not accept them. I have tried extremely hard to wrap my head around Gold and Silver, but to this date I cannot find a use for them except investing for a "bright" future.

It's not only me either, but the overwhelming majority of those around me will not accept a silver coin if say the grid was down. Beans, Bullets, and Band-aids....

I am all ears to anyone that could explain the value of a chunk of metal post-SHTF. Less we can smelt it into bullets?


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## Tacitus

One online source for PMs sells gold American Eagles for ~$17 more than gold Canadian Maple Leafs.

I have to wonder if the premium is worth it. If no SHTF, then the seller buys back with same split, so it doesn't matter. But if SHTF, I have to wonder if the split in value would hold. I have to think not. And yet, I am in the US, and I have to think US coins will be more transferable than Canadian, in a without-the-rule-of-law scenario.


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## Cabowabo

Honestly the way I look at it. The only precious metal I will buy is lead. Because to quote The great Actor Clint Eastwood "I deal in Lead, Friend."
Bullets will always be worth money.

For any kind of barter I'd put a higher value on useful items over Precious metals. For instance you could probably have offered someone in Katrina a silver 10 ounce bar for their last roll of Toilet Paper and been laughed at. I think gold and Silver have been over sold as survival options. No one NEEDS Gold or Silver or Platinum to live. nor will they provide creature comforts. They might one day be worth money at the peak ends of the disaster but probably not in the valley.

Consumables are probably the better place to invest. I'd value Mags, Ammo, Toilet Paper, food, etc over Precious Metals. 

IMHO .02.


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## Tacitus

Worldengineer and Cabowabo make very good points. (OK, all posters have made good points so far.) Although, even in medieval societies, PMs were used, so I'm not sure it is a certainty that PMs will be valueless.

My preps go in phases, and lately I've been focusing on PMs mostly because I think we may be in some kind of a market buble, and I feared a crash (SHTF) more than I feared returning to the stone age (WROL/TEOTWAWKI). Also, I decided that not large enough portion of my savings was in PMs, and putting some more in PMs would be good for me...and for my kids. I'm buying/targeting PMs in multiples that will convenient to leave to my kids in the assumption/hope that I will never need to use the PMs. I'm not buying big bags of the stuff, but I think some will be useful.


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## Woody

I do have PM's. I also have cash. The PM's are more of a long term store of value to me. 

I believe, in the OP's first scenario, cash will still be king. The sheeple are not going to freak out and go straight to an unknown money system, they will go for what they know and feel comfortable with. Heck, cash might even be more valuable for a time! If all anyone has is plastic, and they NEED to buy something, you might be able to pick up PM's at a real discount or make some great trades for it.

In the second scenario, cash will still be king for a bit. Even if the MSM talking heads are saying the world economic system collapsed, the sheeple will not believe it right off. In more rural areas it might not matter, all anyone has is green backs, it is all they have known. How long would it take TPTB to come up with a replacement, or place a value on the dollar? Think on it... What would the sheeple do if tomorrow morning the talking heads reported the dollar is worthless. ALL transactions now NEED to be electronic, but all electronics are down. The dollar is dead!!! Your bank account of $1,000 is now worth $500, or $250, or $100! Would people accept or believe this or scramble to green backs?

If it is a long term situation, another form of "money" will come around, it most likely be PM's. OR.. PM's value will be based on the 'new currency'. In any short term situation, which I consider a few days to a few months, cash will still be king. The U. S. could also outlaw owning Gold, or any PM, like happened in the 20th century. And... What happened to the "value" of it since then?


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## jeff47041

I think junk silver would be the most easily accepted payment after SHTF. If I were to sell something like my services or eggs or something, I would have a hard time accepting a piece of gold or silver because I really don't know the difference between real & fake. And if I accept fake silver as payment then go try to buy something from someone who knows the difference, I'll be killed for trying to cheat them.

I would accept pre 65 coins way before I would accept a small chunk of something that looks like silver. But, I would also accept a barter item over an old coin. 

I have bought some silver. But I really don't know if it is real or not. Just because .999 is stamped on it along with a serial number from a manufacturer doesn't mean a whole lot to me. If bad things were to happen, I would be half scared to try to use these as payment. And I'd be really leery of someone trying to pay me with them.


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## Cabowabo

I think ya'll make some very solid points on PM'S and their use or why they are important. I'm taking the harder line on PM's because I know someone will stumble across this thread at some point in the future and with not a full understanding of where ya'll are coming from buy a bunch of PM's without taking care of the basics first.
Honestly I would rate PM'S at the bottom of the prepping list. I'd rate Food, Water, Housing, Energy, Security, and Communication higher on the list. 

The more damage something does and the bigger it is, means its less likely to happen. Hurricanes, Loss of Job, etc I think are all more likely then a Hollywood style disaster. Not saying the Big disaster can't happen, but if you buy a year of Mountain House, and have no savings you would be in a bad position...

In the Beggining of a disaster I would rate the Dollar as the currency of choice. The Sheep will still accept it, the biggest danger will be holding onto it to long in an economic collapse and hyper inflation take it out and then even the sheep won't even want it.

In the middle Food, Water, Housing, Energy, Security, and Communication rate higher, because I can't eat PM's, make a house out of 'em, they won't provide me energy, nor will they help me stay alive. And people PM heavy and only PM heavy in this scenario will have a rough time IMHO because you don't NEED PM'S. And the person with the Consumables are in a bargaining position of power, and most of those consumables are renewable resources.

At the end of the disaster as we are building up out of the valley of the disaster then yes I see PM'S having some use, but at that point I think we will see a lot of PM's having changed hands already. Or the issue of new funny money.


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## TheLazyL

worldengineer said:


> When it comes to PM's in any SHTF situation I will not accept them. I have tried extremely hard to wrap my head around Gold and Silver, but to this date I cannot find a use for them except investing for a "bright" future.
> 
> It's not only me either, but the overwhelming majority of those around me will not accept a silver coin if say the grid was down. Beans, Bullets, and Band-aids....
> 
> I am all ears to anyone that could explain the value of a chunk of metal post-SHTF. Less we can smelt it into bullets?


I'm in agreement with you.

You'd would have to be very very careful who you offered PM for a purchase/trade. Wrong person learns you have PM...

Even if I have a unlimited supply of food I can't think of one signal reason to sell some for PM. PMs don't provided nourishment, physical protection or health.

Well you buy PM to keep ahead of inflation!

Silver been averaging around $7 and gold $345 since 1915 with a jump in 1980 and another in 2011.

You had the savvy to purchase low and sell high, pay the taxes and still turn a profit good, for you.

If PMs are such a good investment why are there so many Firms willing to sell?


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## BillS

worldengineer said:


> When it comes to PM's in any SHTF situation I will not accept them. I have tried extremely hard to wrap my head around Gold and Silver, but to this date I cannot find a use for them except investing for a "bright" future.
> 
> It's not only me either, but the overwhelming majority of those around me will not accept a silver coin if say the grid was down. Beans, Bullets, and Band-aids....
> 
> I am all ears to anyone that could explain the value of a chunk of metal post-SHTF. Less we can smelt it into bullets?[/QUOTE
> 
> PM's would be good as a form of money after the collapse. They're ALWAYS sought after and recognized as valuable during times of hyperinflation, war and currency collapse. It's common during famines for people to engage in grave robbing as a way to get gold to buy food.
> 
> No, I wouldn't buy PM's if I needed food, guns, fuel, whatever. I'd buy that stuff first.
> 
> As I'm sure it's been said a thousand times before, PM's are what you put your savings in once you're fully prepared. They're good for hyperinflation leading up to the collapse. They'll be good again once the federal government regains control of the country.
> 
> I have about a year's worth of grocery money in gold and silver. If I make it to the collapse with some left that means I didn't have to eat my preps before the collapse.


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## Tacitus

TheLazyL said:


> If PMs are such a good investment why are there so many Firms willing to sell?


Because the firms aren't buying them as an investment. They are in the business of buying and selling as much volume as possible. They buy slightly below spot market price, and they sell slightly higher than spot, and over time, they make a living by taking a profit on each transaction they make.

My local store publishes both its buy prices and its sell prices--total transparency. You know exactly how much money they are making in every transaction; they are telling you what their profit is. I like that, and I don't begrudge them their profits, just like I don't begrudge other retailers their profits. We all have to make a living...and at least in this case, I know exactly how much I'm paying them for their services.

Of course, if it all goes to hell in a hand basket, then their on-hand inventory becomes very valuable, which is nice.


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## DM1791

*My take on PM....*

Some points have been made that are quite valid....

1) You can't eat PM's.

Very true. You need to stock up on non-perishable foods of some kind as well as seeds. Even if you live in an urban environment, seeds are a must. If your yard can grow grass, it can grow beans. Fresh water falls in this category as well (either bottled, or in the form of filtration systems).

2) Bullets.

You need a good and reliable stock of ammo, without a doubt. Not just from a security standpoint, but for hunting as well. Small caliber and large caliber are a must because as any hunter will tell you, you're much more likely to have success on a squirrel hunt vs. an Elk hunt.

3) Medical supplies

A good stock of basic medicine is also a must. You'd want some things like Ibuprofen/Acetaminophen for fevers, antiseptics of some kind to clean wounds, basic suture kits, pressure bandages, coagulants... Essentially a solid field medicine kit.

Now, all of that being said, there is absolutely a valid use and need for precious metals, especially in a true SHTF scenario.

The fact is, in that kind of situation, barter is going to be the basic method of commerce for local communities, without a doubt (as in, I'll trade you two chickens for three bushels of corn). However, there will inevitably be a need to trade for things at a longer distance than you can safely walk/carry the goods necessary for barter. That is why coined money began in the first place several thousand years ago.

In a true breakdown scenario, the cities will fall. They simply can't support themselves. A typical US city has roughly 500k people living on an area of land that could feasibly support 1/5th that number. This is a recipe for widespread starvation, desperation, and violence. The cities that don't completely fall will end up being violent and dangerous to the extreme (look at New Orleans 4 days into the Katrina after math).

With that being the case, the safe havens will be out past the suburbs in the small towns and farming communities, most likely. However, these places won't have everything the need to survive (medical supplies run out, ammo stores run dry, etc.). So the profession of the traveling peddler will arise again, and that means portable value (i.e. money) will be needed.

Even in a less extreme situation, such as a large scale devaluation of the dollar, barter can only get you so far. If you read historical accounts of the Weimar Republic especially, you see precious metals (and gems) as the go-to currency once the Mark fell to disastrous levels.

Bottom line, there will come a time when you need something that someone else has to spare, and you won't have any hard goods they want or need to trade for it. But, when the rubber hits the road, people will always take gold, silver, and certain gems (most notably rubies, diamonds, emeralds, and sapphires).


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## TheLazyL

Tacitus said:


> ...They buy slightly below spot market price, and they sell slightly higher than spot, and over time, they make a living by taking a profit on each transaction they make. ...


That reminds me of the local bank. They're displaying a real shiny 2014 dime in a case marked "Uncirculated" for $2. Why would I want to pay $2 for a 10 cent dime? Perhaps in 20 or 40 years it might be worth $2.

So I reckon paying more for PM then what it is worth, with hope that sometime in the future I can break even or make a profit sort of make sense but then wouldn't I have to sell below spot? At least I know the dime will still be worth 10 cents unless Obama "wins" a 3rd term...

PM could be a step above buying stocks.  Stock is a worthless piece of paper that you buy with hope you can sell it for more then you paid for it.


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## Woody

That is a good point that I don't think has been brought up yet. Pre-1965 U. S. silver coinage or current 1 ounce Silver Eagles. If a situation goes on for longer than a month or so, folks are going to need to trust a 'currency'. Or in the above example of trade with wandering carpet baggers, they will not likely want to trade for goats, sheep or such. They will want a portable TRUSTED 'currency'. Word would spread about pre 1965 dimes, quarters, halves and even the silver eagles as being real silver. Pretty hard for the average Joe to mint fakes too. So whatever you 'paid' for that 1960 dime, it will never be worth less than Ten Cents. Now, that piece of paper that says it is worth 1,000 ounces of silver? Maybe not so much confidence.

The silver bars or commemorative silver rounds you might not get as much confidence, unless it is a popular one in the area that folks are familiar with. 

Granted folks under 20 or even 30 or 40, might have no idea about pre '65 coins. But folks at the half century mark and older will know and word will spread.


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## Woody

TheLazyL said:


> That reminds me of the local bank. *They're displaying a real shiny 2014 dime in a case marked "Uncirculated" for $2. Why would I want to pay $2 for a 10 cent dime? Perhaps in 20 or 40 years it might be worth $2.*
> 
> So I reckon paying more for PM then what it is worth, with hope that sometime in the future I can break even or make a profit sort of make sense but then wouldn't I have to sell below spot? At least I know the dime will still be worth 10 cents unless Obama "wins" a 3rd term...
> 
> PM could be a step above buying stocks. Stock is a worthless piece of paper that you buy with hope you can sell it for more then you paid for it.


Maybe not even then. I have every "proof" set from 1955 to date, and every "mint" set from somewhere in the 70's onward. Many you can still buy for what I paid for them right from the U. S. mint. Maybe some are even cheaper now too! Granted, many have gone up in "value" but you never know. It was my first 'retirement strategy', as a young lad buy "collector" coins as they always go up in value.

I also have "Morgan Dollars" I paid several hundred dollar for, and many that were under $10 each. Double Eagles the same. A couple bags of pre '65 change that at the time was picked out of change. It is like playing the stock market, you might win, you might lose, BUT! With my coins, at least the silver ones, they will never be worth less than face value. At least that is still my way of hoping it goes!!!!!!!


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## DM1791

TheLazyL said:


> That reminds me of the local bank. They're displaying a real shiny 2014 dime in a case marked "Uncirculated" for $2. Why would I want to pay $2 for a 10 cent dime? Perhaps in 20 or 40 years it might be worth $2.
> 
> So I reckon paying more for PM then what it is worth, with hope that sometime in the future I can break even or make a profit sort of make sense but then wouldn't I have to sell below spot? At least I know the dime will still be worth 10 cents unless Obama "wins" a 3rd term...
> 
> PM could be a step above buying stocks. Stock is a worthless piece of paper that you buy with hope you can sell it for more then you paid for it.


The difference is in scale. Where I might buy gold at 1200 an ounce for ten ounces and hold it until it hits 1500 an ounce to sell for a profit, a bank or other large trader doesn't have to wait nearly as long.

If you are dealing in transactions that stand in the millions, then every 1% gain is at least 100,000 $. If you are trading a bulk transaction of $100million in gold bullion bought today, and gold sees a 3% increase from today to tomorrow, even if you sell for half of that mark up you are still bringing in $1.5 million in profit. Not a bad margin of return for a 24-hr investment.

Large trading groups are also off loading precious metals, in many cases, to offset losses in other areas of their balance sheets. Bear Stearns did this same things in the 18 months leading up to their collapse. Off loading precious metals holdings a bit at the time allowed them to artificially elevate their balance and return sheets, creating the false image of stability.


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## TheLazyL

DM1791 said:


> The difference is in scale. Where I might buy gold at 1200 an ounce for ten ounces and hold it until it hits 1500 an ounce to sell for a profit, a bank or other large trader doesn't have to wait nearly as long....
> 
> ...bulk transaction of $100 million in gold bullion bought today, and gold sees a 3% increase from today to tomorrow, even if you sell for half of that mark up you are still bringing in $1.5 million in profit. ...


I understand how a Larger Trader can make money in PMs.

I don't understand why an individual would buy something at a higher price then what it is worth with hopes to make a small profit.

Or gold sees a 3% decrease for a 3 million dollar lose. The Larger Trader will adjust their profit to compensate for the lose. The Individual will just have hang on and hope.


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## ZoomZoom

TheLazyL said:


> I don't understand why an individual would buy something at a higher price then what it is worth with hopes to make a small profit.


But nobody knows what it will be in the future.

Silver in the past 2 years has been as low as $16.xx and as high as $39.xx.

Right now it's $17.xx

The question is, from the current $17.xx is it going to head back up or fall even farther.

If you have the means to "let it ride", it normally trends upwards. If you have to cash it out, that's when you're at the mercy of the market on that particular day.


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## Woody

Here is a good chart showing silver prices, 30 days, 60 days, 1 year.... up to 1975 to present.

http://therealasset.co.uk/charts-and-graph/silver-price-charts/

I had a buddy, another Woodchuck, who sold everything in 1980, at $40 or $42 and ounce. He suggested I do the same. I was like "why? It is still going up???" He said he made 10x his investment, he was happy with that, no need to be greedy. I held on and gloated when it went to almost $50. Then... It crashed just as fast. You could not sell any as no one wanted to buy on the way down. He waited about 10 years before he started buying again. He said it was only a matter of time until it happened again, be ready. His advice was to not be greedy, get a good return and bow out. Wait for a stabilization, then buy and hold for the next jump. Wait for a decent jump, to get a return, then bow out. Haven't talked to him in years, but imagine he sold at about $40 again. Bastard!

I'm one of those morons who hold on for the long run thinking a steady, slow increase. He was correct though, I give him that. It is not a consumer or 'need' based market, it is a fixed market rigged to make lots of money for some folks, and to get that money from lots of other folks. So, I might not have cashed in, but I still have my stacks to fondle. Are we headed back to $4 silver or not?????


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## Tacitus

TheLazyL said:


> I don't understand why an individual would buy something at a higher price then what it is worth


You do that every time you buy food at the grocery store. You pay extra (slightly "more than the food is worth") so that the store can pay the food delivery company, its employees, its electric bills and make a profit for the owner. That's all the mark-up is for PMs. That's why I pay a "higher price than it is worth."


TheLazyL said:


> ...with hopes to make a small profit.


I don't buy to make a profit. I buy to preserve value.


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## HardCider

All very good answers and it would be different for each of us. For me where I find myself, I'll stick to spending my resources on land, structures, tools, and improving food sources. I'll keep my molds, melting pot and hundreds of pounds of lead. That's my PM. Maybe you are pat with everything you possibly need then PM's could be a good hedge for you for down the road but when you are cold, thirsty or hungry that gold or silver may end up next to worthless.


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## millertimedoneright

My thinking on pms is a little different than most. If you want that value for shtf then by stocking up on lead, ammo, food, etc you can easily trade anything extra you don't need for silver and gold of those who are in need of the extra items you have. By having needed items you can easily trade tons of gold or silver for just a little extra. Someone desperate for food or ammo will give every bit of gold or silver they have for a handful of can goods.


Sent from my iPhone using Survival Forum


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## ZoomZoom

millertimedoneright said:


> My thinking on pms is a little different than most. If you want that value for shtf then by stocking up on lead, ammo, food, etc you can easily trade anything extra you don't need for silver and gold of those who are in need of the extra items you have. By having needed items you can easily trade tons of gold or silver for just a little extra. Someone desperate for food or ammo will give every bit of gold or silver they have for a handful of can goods.


As mentioned in my previous post, PM's should not be sold out of need. You sell when you want.

Whomever has the PM's after the SHTF event will be wielding a lot of financial strength.


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## TheLazyL

Tacitus said:


> You do that every time you buy food at the grocery store. You pay extra (slightly "more than the food is worth") so that the store can pay the food delivery company, its employees, its electric bills and make a profit for the owner. That's all the mark-up is for PMs. That's why I pay a "higher price than it is worth."I don't buy to make a profit. I buy to preserve value.


Food you can eat. PM's sit in a hopefully safe place and does nothing.

Preserve value? This is what I'm having a hard time grasping. For the last 100 years (other than 2 peaks), silver value has remand constant at around $7. $7 today buys a lot less then in the past. So I don't see an investment in silver as a way to preserve value. Gold is the same as silver.

Now if the resale value of PMs average an increased 2 or 3% a year then I could grasp the concept.


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## DM1791

Woody said:


> ... Are we headed back to $4 silver or not?????


 I don't know where silver is headed. I don't really factor that into my purchasing philosophy. What I look at is where is the dollar headed?

In my estimation, the dollar is in some serious trouble. There are trade agreements being signed left and right to conduct foreign transactions independent of the dollar. The FED is now monetizing the debt at a record rate. US T-bonds are getting tougher to sell in foreign markets.

And, most notably, our national debt is $17+Trillion dollars, and shows no signs of stopping.

As more and more dollars are printed, unless silver and gold production from mines and refineries can somehow keep pace, the value of PM's will necessarily go up. If you look at it as a supply and demand equation, there really isn't any other option. As you drastically increase the supply of the dollar without significantly increasing demand (at this point, if anything, foreign demand is plummeting) then the "price" of the dollar must go down. In terms of PM's that means less PM per dollar or, conversely, a higher price in dollars per ounce.

If you look at commodity pricing across the board, the same curve can be seen over the last 40 years; relatively stable prices followed by an exponential increase in price. That trend holds true for corn, soybeans, cotton, timber, pork, beef, oil, gold, silver, etc. Aside from some seasonal fluctuations induced by weather, the bulk of this exponential growth curve has been fueled by an overproduction of the dollar.

That is a trend that shows no signs of changing any time soon.


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## TheLazyL

millertimedoneright said:


> .. By having needed items you can easily trade tons of gold or silver for just a little extra. Someone desperate for food or ammo will give every bit of gold or silver they have for a handful of can goods.


TEOTWAWKI what good will be the tons of gold or silver you traded for?

Will there be any PM Merchant around to buy it from you? And if there is a Merchant what will they pay you with?

Will the new government redistribute your wealth for you?

I just can't grasped what the benefit in investing in PMs will do for me during TEOTWAWKI.


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## Woody

TheLazyL said:


> TEOTWAWKI what good will be the tons of gold or silver you traded for?
> 
> Will there be any PM Merchant around to buy it from you? And if there is a Merchant what will they pay you with?
> 
> Will the new government redistribute your wealth for you?
> 
> I just can't grasped what the benefit in investing in PMs will do for me during TEOTWAWKI.


They are not an investment for it, they are a store of wealth for after it. What has, for centuries, been considered something of value? Silver and gold. Fiat money has no value, the value is based on what people believe it is worth. Look at 'money' from centuries ago, ancient coinage. They might have value as a collector item but they still have intrinsic value due to their content. I am not saying that centuries ago an ounce of silver was worth one penny, and today it has increased dramatically in value, but it has held value.

An ounce of silver or gold has value. Might be $20 today, might be $100 or $1 in the future but it still has value. Fiat money has a value today, but is not really worth anything, except to maybe start a fire. A $100 bill and a $1 bill are the same thing, with a few zero's added. An ounce of gold and a pound of gold are two different things. Think of it as... I show up with 10 goats and say "I have 10 goats here." People look and say, yes I see you have 10 goats. If I showed up with a piece of paper that had "10 goats" written on it, that is like Fiat money. People would have to believe that it actually represented 10 goats, or it is just a piece of paper.

Now, I don't know why silver, gold, gems and such became the store of value. Heck, at one time pretty shells were worth 'money'. But... PM's have been a reliable store of 'value' for a long, long time. Maybe in the future they will be worth nothing! Show up with an ounce of silver and be laughed at! Folks will consider... toe nail clippings to be worth 'money' and be the new valuable commodity! I believe potable water will be the 'currency' in the not too distant future.

But, at this time, gold and silver are the store of value accepted. AFTER folks have themselves comfortable setup with a day, week, month, year, or sustainable existence, I believe it is prudent to put the 'extra' fiat money into a store of value.


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## Woody

DM1791 said:


> I don't know where silver is headed. I don't really factor that into my purchasing philosophy. What I look at is where is the dollar headed?
> 
> In my estimation, the dollar is in some serious trouble. There are trade agreements being signed left and right to conduct foreign transactions independent of the dollar. The FED is now monetizing the debt at a record rate. US T-bonds are getting tougher to sell in foreign markets.
> 
> And, most notably, our national debt is $17+Trillion dollars, and shows no signs of stopping.
> 
> As more and more dollars are printed, unless silver and gold production from mines and refineries can somehow keep pace, the value of PM's will necessarily go up. If you look at it as a supply and demand equation, there really isn't any other option. As you drastically increase the supply of the dollar without significantly increasing demand (at this point, if anything, foreign demand is plummeting) then the "price" of the dollar must go down. In terms of PM's that means less PM per dollar or, conversely, a higher price in dollars per ounce.
> 
> If you look at commodity pricing across the board, the same curve can be seen over the last 40 years; relatively stable prices followed by an exponential increase in price. That trend holds true for corn, soybeans, cotton, timber, pork, beef, oil, gold, silver, etc. Aside from some seasonal fluctuations induced by weather, the bulk of this exponential growth curve has been fueled by an overproduction of the dollar.
> 
> That is a trend that shows no signs of changing any time soon.


A couple good points!

First, I am no financial wizard or know it all. I can't predict the future and don't pretend to do so. I'm just a country boy who notices stuff.

Supply and demand. Last year physical Silver was out of stock, you could order it but they had to wait for some to come in before they shipped to you. Demand was high! Yet, the price kept dropping. Same with physical Gold, countries were buying all they could get their hands on!!! The price kept dropping. Now, PAPER silver and gold were in abundance! You could buy all the PAPER PM's you wanted and they seemed to be happy to print more of them. Huh?

Corn, soybeans, pork bellies..... The price is not set on what the ACTUAL crop is, it is set on the PREDICTION of what the crop will be. They are based on the "futures" market. Gambling, like in the stock market. Some win, some lose, but the folks doing the actual gambling always win because they take a cut either way. Granted, prices adjust once the actual crop or production come in, but initially, they are set on a whim.

Then comes the world reserve currency. I would hope folks reading this would understand how a "fiat" currency works. For every fiat 'dollar' created, it is actually a dollar PLUS interest on that dollar. If only one 'dollar' was ever created it could never be paid back because there is nothing to cover the 'interest' created by that fiat dollar. More dollars need to be created to cover the interest, which creates more interest so more dollars need to be created to cover it.....

And that is all I have to say on that.


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## millertimedoneright

TheLazyL said:


> TEOTWAWKI what good will be the tons of gold or silver you traded for?
> 
> Will there be any PM Merchant around to buy it from you? And if there is a Merchant what will they pay you with?
> 
> Will the new government redistribute your wealth for you?
> 
> I just can't grasped what the benefit in investing in PMs will do for me during TEOTWAWKI.


It's not about owning tons of gold or silver for it's value during the bad times. It's about creating wealth for the times after everything comes back together.

Sent from my iPhone using Survival Forum


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## TheLazyL

Silver is down 21%

Explain to me again how PM preserves your money, please.


Sent from my iPad using Survival Forum


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## DM1791

Simple.... It doesn't. Precious metals don't "preserve your money." They preserve value, wealth, and purchasing power. It's a simple supply and demand issue. As long as dollars are printed (physically and electronically) at a whim and the push of a button, the relative scarcity of precious metals will demand that they preserve more actual value than a paper dollar will. 

And, yes, silver is down 21% if you look at the right chart. However, if you look at a 30 year chart, the story is very different. As with most things, as the time line is extended, the gains due to inflation outweigh any temporary price fluctuations. However, the major difference between hard commodities like gold, silver, timber, etc. is that in a crash, the digitized "dollars" held in a stock account, 401k, CD, etc. will mean absolutely nothing. 

Good luck in a post crash scenario convincing someone to take a debit card or some other form of digital currency. Also, in a government failure/collapse scenario, the fiat currency loses all viability on the international markets. Look at what happened to the Peso back in the mid 80's. The currency was inflated to the point of instability, it crashed, and became near worthless over night. People in Mexico who were millionaires found that even within their own country they had very little purchasing power. 

There are two main reasons that the dollar has not gone down the same destructive path. 1) The dollar is still in high demand in foreign markets for currency swap transactions. However, this demand is steadily decreasing as more foreign markets go the way of China and Russia, and form regional currency swap blocs that bypass the dollar exchange entirely. 2) There is currently no other national currency that has the relative stability and reputation of the US$. As our currency is manipulated and inflated by the FED, that trust is being slowly, but steadily eroded (hence the regional currency swap blocs mentioned previously). With China and Russia both stockpiling huge PM reserves, there is a plausible scenario where one of the two declares their national currency pegged to the value of either gold or silver, creating a stable and physically backed currency. Such a stabilizing move would drastically undermine the position of the dollar and make that national currency much more attractive for foreign exchange transactions. 

If PM's are viewed as an avenue for financial growth, then they are inherently unstable and high risk. Short term fluctuations can translate into high amplitude shifts in price and large scale shifts in demand/production create an unpredictable environment that is much less attractive than other growth oriented avenues such as stocks, bonds, etc. However, if they are looked at as a safe haven guard against either inflation or currency collapse, then there are few things that are more secure. Real estate is still dependent on the value and validity of the dollar, as are most other commodity holdings. Of course that dollar value can still be transferred to silver/gold value, but that brings us back full circle to the underpinning stability of PM value.

All of the above is simply my own understanding and perception of precious metals. PM's are, by far, not the only investment I have made to safeguard my financial stability. However, they do make up a portion of my portfolio, as most honest financial advisers would recommend (I am not, in any way, a financial adviser). I have several friends who are deep in the financial world in the form of advisers and corporate accountants. All of them have at least some form of physical commodity in their investment portfolio. Different ones invest in different things (PM's, land, cattle, timber, etc.) but the bottom line is all of them agree that having a physical investment outside of in-the-hand cash is a good idea.

:beercheer::cheers: TGIF


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## Marcus

TheLazyL said:


> Silver is down 21%
> 
> Explain to me again how PM preserves your money, please.


100 years ago, 1 oz of gold would buy a good suit. The same is still true today.

PMs are a store of wealth or value, not a store of money. Given the dollar has lost 96% of its' purchasing power in the last 101 years, surely you're not worried about short term variations in PM prices.

Other than the risk of theft, there are no other risks associated with PMs (assuming you buy from a reputable source.) The government can't print more gold, nor can they easily steal it since it is very concealable. Banks can't deduct fees from your PMs. Hackers can't steal your PMs. In short, it is a stable store of value whose price varies according to supply and demand.

Can the PM markets be manipulated? Of course. The Hunt Brothers proved that. But over the long term (decades), it still retains its value.

So how much should a prudent person invest in PMs? 5-10% of your net worth at the most. It's a way to help you start over except you won't have to start over from scratch.

As others have mentioned, PMs are not useful during the SHTF. But afterwards, they will be essential to restarting an economy. Bartering is not an efficient way to conduct trade on a large scale. So something will have to suffice as a recognizable currency. Given the disdain the survivors will have for any sort of fiat currency if there is an economic collapse, only some sort of commodity or group of commodities will be acceptable to the masses.

What about food and ammo as a currency? Both degrade over time depending on storage conditions which will be unknown to one party in the transaction. Now during the SHTF, both will become very valuable for a time. But as things stabilize, the value of both will fall closer to historical norms as agriculture and manufacturing return.

The issue with gemstones has to do with assigning value. The average person only knows carat weight and little to nothing about grading. Thus the default will be the lowest quality.

Oil is a possible currency, but it is bulky and requires processing for optimal valuation.

Knowledge in the form of technical books (agriculture, metal working, and other 18th-20th century technologies) will likely become very valuable if the level of the collapse is sufficient. But these are rather bulky.

Purely for convenience, acceptability, and portability, PMs will likely be the future currency.


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## BlueShoe

Why isn't silver/gold going up when mints have to shut due to metals shortages? King World News recently interviewed a former Assistant Treasury Secretary who says major banks are doing a similar thing as the Federal Reserve by creating gold/silver paper assets, then immediately dumping them on the markets, effectively inflating the metals which holds the price down.


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## Woody

BlueShoe said:


> Why isn't silver/gold going up when mints have to shut due to metals shortages? King World News recently interviewed a former Assistant Treasury Secretary who says major banks are doing a similar thing as the Federal Reserve by creating gold/silver paper assets, then immediately dumping them on the markets, effectively inflating the metals which holds the price down.


You asked and answered your own question! Unless you were posing it to someone else and rhetorical.

To LazyL: folks are correct. You are not preserving the value of FIAT money by having PM's. You are preserving VALUE of what fiat money you did use to buy them.

Let's try it this way... Say 5 years ago you could buy a 12 pack of TP for $4.99 using fiat USD. Today that same 12 pack is $9.99. Did the value of TP INCREASE that much in a few years? No, the value of the fiat USD to buy them with decreased that much. And why does it take more USD to buy the same thing today? Because there are a LOT more USD's in existence today. So the more USD in existence, the less each one is worth.

Move to PM's, let's use silver. 5 years ago silver was what... $10 an ounce? Today it is around $20 an ounce. In-between it went up to almost $50 an ounce, then crashed back down.

Now, back to TP. 5 years ago to get a physical 12 pack in your hands, cost $5. Everyone who wanted it could buy it for $5, supply was meeting demand. Someone comes along and says 'Hey! I'll give you a piece of paper that is worth one 12 pack of TP for $4!... Bad example as everyone needs to use TP, unless you have a pile of Sear's Catalogues around...

Silver! At $10 an ounce, everyone who wanted it could buy it, supply meets demand. Someone comes along and says I have a piece of paper that is worth one ounce of silver for $10! How many do you want??? Half the people who want to buy silver think, why should I haul all this heavy crap around when I can have a piece of paper worth the same thing? The price of silver falls to $5 an ounce because everyone who wants it can get it, there is more than meets demand. Folks like me who actually like to have something to fondle go I'll take some but in physical form!!! The folks with physical silver say we don't have it, but you can buy all the paper silver you want. The "commodity" price falls to $5 even for physical because folks are trading paper like the real thing.

Even though there is not enough physical silver to meet demand, enough folks trust paper silver that that is the current standard. Does that mean the actual physical metal "lost value"? NOPE, not at all!!! Actual physical silver is actually more valuable. There are 10 paper silver ounces for every actual physical silver ounce in existence. What happens when all those folks with paper silver think they would rather trade them in for actual physical silver? There is not enough actual silver to meet demand and the price will go up because of high demand.

To look at it from your 1800's view, what would an ounce of silver buy then? What would it buy today? Pretty similar, eh? The 'value' of silver, or gold, did not go down, everything else went up in relation to it. The only reason it is fluctuating so much these days is more of it is in paper form and has nothing to do with reality.

In the mid 1960's I saved all the dimes, quarters and half dollars I could, they were worth face value then. What are they worth today?


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## BlueShoe

Woody said:


> You asked and answered your own question!


No. The question was alluded to by someone who I did not quote.


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## GaryS

One thing that hasn't really been considered is how PMs can also suffer from inflation. If the post apocalypse world has half as many people, but the same amount of PM, the metal has in theory lost half its value because the supply and demand ratio is no longer tied to human labor or human consumption.

There is no perfect investment for everyone for every situation. I've made my best guesses for my family's worst case situation and diversified based on those guesses. I'm certain many of those guesses would be wrong, but without the ability to know what might happen, and when or to what degree, I can do no more.


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## BlueShoe

Once when discussing the Gold Standard someone brought up how economic collapse happened in the late 1400s or early 1500s while using the Gold Standard. This was an argument against a Gold Standard. I didn't research but it's possible it was caused by the 2nd European invasion of the Americas starting with Columbus and the plunder of gold that transpired out of South America.



Woody said:


> Even though there is not enough physical silver to meet demand, enough folks trust paper silver that that is the current standard. Does that mean the actual physical metal "lost value"? NOPE, not at all!!! Actual physical silver is actually more valuable. There are 10 paper silver ounces for every actual physical silver ounce in existence. What happens when all those folks with paper silver think they would rather trade them in for actual physical silver? There is not enough actual silver to meet demand and the price will go up because of high demand.


But until that time happens, the physical silver IS worth less than actual demand. Until the paper assets are removed, or honestly valued, then we're seeing fully manipulated values. People have been speculating on when this will happen, but obviously it's much longer of a time than most thought.

I found a silver Quarter, Dime, a 1946 Wheat Penny and a Bicentennial Half Dollar in an old car I bought. :2thumb:


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## Woody

BlueShoe said:


> Once when discussing the Gold Standard someone brought up how economic collapse happened in the late 1400s or early 1500s while using the Gold Standard. This was an argument against a Gold Standard. I didn't research but it's possible it was caused by the 2nd European invasion of the Americas starting with Columbus and the plunder of gold that transpired out of South America.


Never heard about that.. or even thought about it that way, buy true it would have flooded the market and brought down the price. But that should have also been used as the same argument against a fiat dollar where a private, for profit company, could just print all that is needed.



BlueShoe said:


> But until that time happens, the physical silver IS worth less than actual demand. Until the paper assets are removed, or honestly valued, then we're seeing fully manipulated values. People have been speculating on when this will happen, but obviously it's much longer of a time than most thought.
> 
> I found a silver Quarter, Dime, a 1946 Wheat Penny and a Bicentennial Half Dollar in an old car I bought. :2thumb:


True, but I am a if I don't hold it I don't own it guy. I can buy a piece of paper saying I own 4 cords of wood, but until it is at my place, it is worthless to me. Now, if I heat with gas and can sell that paper to someone for more than I paid for it... Heck! I'll but a 100 more cords of it!!!

But thinking on it... Why would folks still be trading paper PM's if the price is falling? Wouldn't they shun them and move on to something else that is rising in value? Or is it that it really is considered like physical PM's. Once a paper one is created it can never disappear, it will always exist? The more there are the less they will cost so the price will always be falling. Sounds like a pretty good scam to where only the first folks who created and sold them are making money, everyone else who bought them will always lose money as they create more.

Hrmm.. this sounds familiar... Where have I seen pretty pieces of paper being printed and printed and worth less and less before...

Good job on the find!!! The last time I 'found' any silver is when I went into a box that I have dragged from place to place for years, to find something from many years ago. There were 12 Kennedy halves from 1964 wrapped in a piece of notebook paper in it. For all my senior moments, I actually could remember taking $6 I earned and going to the bank to trade it for the halves, over 50 years ago!!! I'm really glad I forgot about them as a few years after that, I'm sure I would have used my fake ID to trade them for 6 bottles of Boones Farm wine.


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## labotomi

GaryS said:


> One thing that hasn't really been considered is how PMs can also suffer from inflation. If the post apocalypse world has half as many people, but the same amount of PM, the metal has in theory lost half its value because the supply and demand ratio is no longer tied to human labor or human consumption.


in a post apocalyptic world a great deal of PMs would be "lost" due to being hidden by people that perished or weren't able to get to them. The amount available for circulation would be vastly diminished.


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## BillM

*When Germany lost the war*

When Germany lost the war, High ranking NAZI's used gold and diamonds to carry their wealth as they fled to south America and Brazil.

An ounce of gold today will still buy the same amount of wheat it would buy in Roman times.

The value of Gold doesn't change . the value of currency changes.


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## BlueShoe

How much gold would it take to buy wheat in Rome back in the Roman empire?
A case of wheat at the LDS cannery is about $27.50 now.


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## Marcus

BlueShoe said:


> How much gold would it take to buy wheat in Rome back in the Roman empire?


It's hard to say since certain emperors devalued Roman currency by introducing impurities into the coinage. It was a quick way for the government to increase its wealth without raising taxes. Kind of reminds a person of inflation, doesn't it?

It's also one of the reasons our founding fathers (who were students of history) specifically gave Congress the power over coinage.

http://en.wikipedia.org/wiki/Roman_currency


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## DM1791

Marcus said:


> It's hard to say since certain emperors devalued Roman currency by introducing impurities into the coinage. It was a quick way for the government to increase its wealth without raising taxes. Kind of reminds a person of inflation, doesn't it?
> 
> It's also one of the reasons our founding fathers (who were students of history) specifically gave Congress the power over coinage.
> 
> http://en.wikipedia.org/wiki/Roman_currency


 So glad someone else sees this. The Roman emperors, by the time the empire finally fell, had devalued the currency to the point that they were literally striking lead coins and coating them with silver and gold, then calling that money. This is one of the reasons you see people in the movies bite a coin, even a silver one. If the coin was lead, it would be softer than either gold or silver, and would take an easy tooth mark. The veneer would also flake off, exposing the baser metal beneath.

And our Congress has done the exact same thing. That is why we now have pennies that have almost no copper content (thin electro coat over zinc) and quarters, dimes, half-dollars that are mostly base metals with a small amount of copper sandwiched in.

Look at a quarter, dime, half-dollar, or "silver" dollar pre-1965 and they were actually made of silver (90% alloy). That money was actually worth something, and not just because the gov't said so. For perspective, a single pre-1965 quarter today is worth about $2.85 according to today's spot price (16.02 an ounce).

That means a quarter minted in 1964 in 90% silver has gone up 11 times what it was originally minted as. That's an 1100% gain over the past 50 years. Average that out and you're looking at roughly 22% gain per year. Now, I'm no financial whiz kid, but anything you can put money in and average a 22% positive gain over the life of the investment seems like a dang good investment to me.


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## airdrop

It may not be just money that gets you thru the SHTF as this guy found out in a war zone , surrounded by the enemy . Meet Selco

http://www.shtfplan.com/emergency-p...ugh-shtf-in-the-middle-of-a-war-zone_10252011


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## BlueShoe

The point was that I don't think we can plainly say (or determine) that the same amount of wheat can be bought today as in the Roman Empire. Over the long term, it's a stable vehicle. But the value is being purposely driven down on the short term, as seen especially over the past 6-8 yrs.

A second point is that Congress really just does what the Federal Reserve tells them they should do. Congress is not made up of economists. They're largely studied in political science and/or law. The Fed makes economic policy. Former Fed appointees, directors and associates advise the President and Congress.


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## DM1791

BlueShoe said:


> The point was that I don't think we can plainly say (or determine) that the same amount of wheat can be bought today as in the Roman Empire. Over the long term, it's a stable vehicle. But the value is being purposely driven down on the short term, as seen especially over the past 6-8 yrs.
> 
> A second point is that Congress really just does what the Federal Reserve tells them they should do. Congress is not made up of economists. They're largely studied in political science and/or law. The Fed makes economic policy. Former Fed appointees, directors and associates advise the President and Congress.


I think a better example than wheat in the Roman empire would be as follows:

In 1908, a $20 double eagle gold coin would buy you a fine suit custom tailored in a clothier in New York. Fast forward today, and the same weight in gold (roughly 1 Troy oz.) is now worth about $1200 dollars. That same gold coin (discounting historical value) will buy you a fine tailored suit.

The suit is different fabric and different style, but it is still a finely tailored suit. The 1 oz. coin is still 1 oz. of gold. The only real difference is the dollar and the value of the dollars that 1 oz. of gold represents.

And as far as Congress doing what the FED tells them to, therein lies the problem. The FED is not a governmental entity and it is not, in any way, responsible to the taxpayers and the general public. The FED is a for-profit private entity that, at this point, has very real power over the entire financial structure of the US, and thereby the world at large. This is how we get tax cheats like Tim Geitner in office in the FED and then crossing over into the Dept. of Treasury.

It's almost like a board member for Bechtel or Haliburton assuming office as VP or Sec. of Defense.... Nothing but good things can come of that, right?


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## BlueShoe

For certain.


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## BillM

*The first form of Inflation*

The first inflation occured when a kingdom would strike a gold coin bearing the king's imiage . This would be used to purchase goods and services from the subjects of the kingdom. The coin contained a known amount of gold.

When taxes were collected by the king, the treasurer would clip a small amount of gold from the edge of each coin and this gold would be used to strike new coins.

The clipped coins would then be exchanged for goods and services by the king and traded at the same exchange rate until the subjects realized that the coins did not weigh the same as before. Then the price would rise to compensate for the reduced weight of the clipped coin.

This is why dollars , Half dollars, quarters and dimes have ridges around the edge. So you can see if they have been clipped.


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## DM1791

BillM said:


> The first inflation occured when a kingdom would strike a gold coin bearing the king's imiage . This would be used to purchase goods and services from the subjects of the kingdom. The coin contained a known amount of gold.
> 
> When taxes were collected by the king, the treasurer would clip a small amount of gold from the edge of each coin and this gold would be used to strike new coins.
> 
> The clipped coins would then be exchanged for goods and services by the king and traded at the same exchange rate until the subjects realized that the coins did not weigh the same as before. Then the price would rise to compensate for the reduced weight of the clipped coin.
> 
> This is why dollars , Half dollars, quarters and dimes have ridges around the edge. So you can see if they have been clipped.


I don't want this to sound the wrong way.... but if this is true, then to me it is the absolute best example to show inflation. The coins actually had less in them so they were literally worth "less" than they had been before.

This kind of physical inflation has now mutated into a scary kind of digital inflation where the dollars are created so fast and in such vast quantities that they don't have any real meaning, much less any real value.

Has anyone even checked to see if it is physically possible to print $85 billion dollars in one month? Given the number of seconds in a month, is that even possible?

I will have to look this up and read some more about it, but talk about amazing. That would be just unbelievable... It makes perfect sense, though. The only way to really "devalue" a standard weight coin without making more coins from new material wouldld be to take some of the metal out of existing coins. You can devalue stuff that is only valuable because you say it is very easily.

It is incredibly difficult to "devalue" something that other people agree is valuable.

The problem with the US dollar at this point is that we don't have any "new raw material" to add value to the system. They are making more dollars, but they are not creating more value by production. This means that the value to fill those dollars has to be borrowed from existing dollars.

At the height of QE, the gov't was given free reign to print $85 billion dollars to buy BAD debt from banks. This wasn't even good investment stuff, this was buying off JUNK stuff. And they were still given free reign to just create and burn up to $85 billion per month!!

That's a lot of value being borrowed.

What can we point to that it actually produced?


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## Marcus

DM1791 said:


> I don't want this to sound the wrong way.... but if this is true, then to me it is the absolute best example to show inflation. The coins actually had less in them so they were literally worth "less" than they had been before.


It's true.

Cheaper metals (so called base metals) were substituted into the coins of the realm so the weight difference wasn't so obvious. Lead was a favorite substitute.

http://en.wikipedia.org/wiki/Spanish_dollar

The link above will help you understand why Pieces of Eight were so popular throughout the world. It's also where we get where 'bits' came from. 2 bits equal 1/4 of a dollar, etc.

Note too that Pieces of Eight were legal tender in the US until 1857.


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## BillM

*Silver coins thru 1857*

The preferred medium of exchange after the collapse of the "Continental " was a Spanish Dollar, AKA , A doubloon or a piece of eight.

It contained an ounce of silver.

This was the preferred medium of exchange east of the Allegany mountains.

West of the Allegany's, they didn't have a lot of silver so the preferred medium was buck skins or doe skins , ( each were worth approximately one Spanish dollar.

This is where the slang for a dollar comes from, A buck or some doe.


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## Dakine

TheLazyL said:


> Food you can eat. PM's sit in a hopefully safe place and does nothing.
> 
> Preserve value? This is what I'm having a hard time grasping. For the last 100 years (other than 2 peaks), silver value has remand constant at around $7. $7 today buys a lot less then in the past. So I don't see an investment in silver as a way to preserve value. Gold is the same as silver.
> 
> Now if the resale value of PMs average an increased 2 or 3% a year then I could grasp the concept.


I"m still going through the posts in this thread so maybe someone else already brought this up, but I see this and I think you've made your own point you just missed the point of what you said, a little bit! 

yes silver was $7 and $7 bought a lot more tangible goods back then, just like you said... But now silver is worth $16 because fiat money buys less than it used to so silver costs more. If you have the exact same $7 of paper currency that you had in your hand 20 years ago, or if you'd spent that $7 paper fiat currency on an ounce of silver... which one of those would let you buy more... TODAY? The silver obviously. You'd sell that ounce for $16 and buy more than twice what that $7 paper money is still representing.

There's your answer on how PM's and in the case most easily affordable for the common folks, is a way to preserve the buying power of their currency. Fiat dollars are currency, PM's are money. There's a difference... but first you have to realize the preserving and hedge part before getting into the rest


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## Marcus

Dakine's post got me to thinking about money and currency.

I recall seeing on the internet a sign in a bathroom in an African country. It asked the folks from Zimbabwe to please not flush their currency down the toilets since doing so was causing the toilets to back up. It was being used as toilet paper.

This is the vital difference between the two. 

The value of a currency floats unless it is directly tied to some valuable commodity like gold or silver. Historically, the value of currency has gone down over time due to government action(s), military losses, or economic recessions/depressions/collapses in the issuing country. Additionally, the value of a particular currency (and its acceptance) is based on the public trust in the issuing authority. Once that public trust is lost, a currency is doomed. There are numerous examples of people living in countries experiencing hyperinflation rushing to spend whatever currency they have before it becomes worthless. In some cases, the passage of mere hours rendered a set amount of currency valueless. Imagine having only a few hours to spend all the money you've saved for retirement before it becomes worthless. Folks will buy anything they think will hold at least some value.

In such situations, PMs hold their value better since they can easily be converted into a stable currency from another country. You just have to make sure to only convert your PMs into as much local currency as you'll immediately use since the rest will quickly become valueless.

In the digital world, you don't even own the paper currency to use as TP.


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