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Why do people say to have some silver around (and gold, if you can afford it) in a SHTF scenario?
Why would I want to trade you a case or a can of green beans for a roll of silver dimes or silver dollars. I can't eat the silver, I can't protect myself with it, I can't use it to build a fire, ad nauseam. Why would anyone trade something of practical value for a small piece of metal? It's portable, so it has that going for it. It's much easier to carry 24 coins than 24 cans of vegetables, but I still go back to "why?" If I take silver in trade, I need to find someone else who will take my silver and give me a bag of apples. I don't get it. What am I missing?
Why do people say to have some silver around (and gold, if you can afford it) in a SHTF scenario?
Why would I want to trade you a case or a can of green beans for a roll of silver dimes or silver dollars. I can't eat the silver, I can't protect myself with it, I can't use it to build a fire, ad nauseam. Why would anyone trade something of practical value for a small piece of metal? It's portable, so it has that going for it. It's much easier to carry 24 coins than 24 cans of vegetables, but I still go back to "why?" If I take silver in trade, I need to find someone else who will take my silver and give me a bag of apples. I don't get it. What am I missing?
Precious metals have a historical and psychological value so they tend to be viewed most favorably as potential currency. Although we do not tell out clients to dump precious metals, we do warn them that the value is only as strong as someone is willing to add value to it. In time, precious metals will have value because it can be used as a currency that represents value an is easily identifiable and traded.
During an initial currency void, copper and/or aluminum sheets will probably have more value than precious metals. Durable goods are another viable currency but will probably be more for bartering and not an organized currency alternative. Two ounces of gold will initially be worth little because of its limited practical use, but in time its value will increase as it can be traded for large monetary values in a small package (like a $100 bill versus $100 worth of aluminum cans) but that depends on some stability in trading.
You are correct that it will be difficult to initially trade 10 oz of gold or silver for a cast iron pot compared to an easy trade if you offer up an axe and shovel.
Why would I want to trade you a case or a can of green beans for a roll of silver dimes or silver dollars. I can't eat the silver, I can't protect myself with it, I can't use it to build a fire, ad nauseam. Why would anyone trade something of practical value for a small piece of metal?
Substitute the word "paper dollars" or "paper currency" for the word "silver" and you have your answer. Throughout human history, gold and silver have been MONEY, a medium of exchange. Although paper money has been tried many times, it always fails. Yet you willingly carry it around in your wallet, even save with it.
The US "dollar" (Federal Reserve Note) has recently undergone a steep devaluation in relation to gold and silver. Gold went from $270 per ounce in 1999 to almost $2,000 in 2011, and has stabilized at $1,100 to 1,200 recently. Silver was below $5 per ounce in 1999, peaked at nearly $50 in 2011, and has stabilized at $15 to 16 recently. When revaluation occurs, the pendulum always swings way past the true value, then chops up and down for awhile before hitting its true value. This is what has been happening recently. Still, people who saw the devaluation coming, made 4x their money in gold, and over 3x in silver.
For now, it apprears that the proponents of paper money have succeeded in defending the paper, but this, too, shall pass...as any student of history will tell you. You must be very young to not remember when our dimes, quarters, and halfs were made of silver, prior to 1965. I remember it well, as my grandparents could recall the days when rich men ownd gold eagle coins, before 1933.
However, buying tangible goods (kersosene lanterns, generators, wool socks, seeds, firearms, cast iron cookware, etc etc) makes good sense if you now have, or expect to have, use for them. The day may come when these items will be unaffordable, or not available. We have liquidated most of our precious metals for land, building supplies, vehicles, and other items of use. I highly recommend this practice.
Why do people say to have some silver around (and gold, if you can afford it) in a SHTF scenario?
Why would I want to trade you a case or a can of green beans for a roll of silver dimes or silver dollars. I can't eat the silver, I can't protect myself with it, I can't use it to build a fire, ad nauseam. Why would anyone trade something of practical value for a small piece of metal? It's portable, so it has that going for it. It's much easier to carry 24 coins than 24 cans of vegetables, but I still go back to "why?" If I take silver in trade, I need to find someone else who will take my silver and give me a bag of apples. I don't get it. What am I missing?
I don't get it either.
Primitive man put a value on gold and silver because they were difficult to acquire in quantity and looked pretty when you made them into things. This made them important status symbols for the ruling class. However, they are simply baubles that hold no real-world value in a SHTF scenario.
When white man first set foot in America, he was able to trade worthless beads and colored glass to the Indians in exchange for vast swaths of their land. Why people think that is any different than modern men trading bits of shiny metal in for thousands of dollars in today's world is far beyond me. That being said, I do own some gold simply because of the value others place on it, not because I believe it holds any kind of practical value.
Quote:
Originally Posted by Nor'Eastah
Substitute the word "paper dollars" or "paper currency" for the word "silver" and you have your answer. Throughout human history, gold and silver have been MONEY, a medium of exchange. Although paper money has been tried many times, it always fails. Yet you willingly carry it around in your wallet, even save with it.
Any why do we place such a great value on a shiny yellow metal in the first place? Why do you think yellow metal has more inherent worth than green pieces of paper?
Substitute the word "paper dollars" or "paper currency" for the word "silver" and you have your answer. Throughout human history, gold and silver have been MONEY, a medium of exchange. Although paper money has been tried many times, it always fails. Yet you willingly carry it around in your wallet, even save with it.
The US "dollar" (Federal Reserve Note) has recently undergone a steep devaluation in relation to gold and silver. Gold went from $270 per ounce in 1999 to almost $2,000 in 2011, and has stabilized at $1,100 to 1,200 recently. Silver was below $5 per ounce in 1999, peaked at nearly $50 in 2011, and has stabilized at $15 to 16 recently. When revaluation occurs, the pendulum always swings way past the true value, then chops up and down for awhile before hitting its true value. This is what has been happening recently. Still, people who saw the devaluation coming, made 4x their money in gold, and over 3x in silver.
For now, it apprears that the proponents of paper money have succeeded in defending the paper, but this, too, shall pass...as any student of history will tell you. You must be very young to not remember when our dimes, quarters, and halfs were made of silver, prior to 1965. I remember it well, as my grandparents could recall the days when rich men ownd gold eagle coins, before 1933.
However, buying tangible goods (kersosene lanterns, generators, wool socks, seeds, firearms, cast iron cookware, etc etc) makes good sense if you now have, or expect to have, use for them. The day may come when these items will be unaffordable, or not available. We have liquidated most of our precious metals for land, building supplies, vehicles, and other items of use. I highly recommend this practice.
Carefull though, because historically speaking gold spiked 6x prior price in about 3 years in the 1970s and then fell back to about half that and stayed there for 30 years.
Silver was even worse and it has almost fallen all the way back to "pre-scare" levels.
In short, I agree with your excellent overall analysis, I am just suggesting that there is a lot of noise and rampant speculation abounding in precious metals and I would caution anyone to not have it as an investment as much as say a precaution.
I invest in Gold, Silver and lead. The first 2 are real money and the last is real protection. All of these give me the feeling of "well being". I also invest in home security and food, these also give me the ability to sleep well at night. I also invest in the dollar (for now) and in assets other then those mentioned.
Why do you think yellow metal has more inherent worth than green pieces of paper?
Because it can't be printed!
Alas...how true it is that "not one man in a million" can detect when his wealth is being plundered!
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