if
- Thread starter ivan
- Start date
Because the GSR will eventually come back to 16 : 1 giving a much bigger percrntage of potential profit. Hopefully anyway.
robertc400 said:
Hi Ivan - there is no rational reason why this ^^^^^^ has to happen.
Yeti Hunter
Member
mmm....shiney! said:
The 16:1 GSR of the 1800s was a government-mandated ratio, not a market ratio. The "true" market ratio was much higher, hence the arbitrage out of silver into gold and the subsequent demonetization in 1873.
mmm....shiney! said:
If you're a Silver Stacker there ar 4X the reason this should happen. For us, all the fundamentals add up to this ratio.
Woohoo, another argument about the "historical ratio" LMAO. Guess I'll have to get The Pelican to change my member status from "Silver Stacker" to "Leper" then. :lol:
Yeti Hunter
Member
Hey, I'd be delighted if it went back to 16! But the to get back to the OPs question, yes I think silver will be currency if the SHTF, as an ounce of silver is more liky to be a reasonable trade for everyday goods than is an ounce of gold (which may well get you killed if you show it in public in a Mad Max world)
There was a great interview with Antal Fekete on just this issue posted in the gold forum a couple of weeks ago...
There was a great interview with Antal Fekete on just this issue posted in the gold forum a couple of weeks ago...
H
House
Guest
^^^
[youtube]http://www.youtube.com/watch?v=eszz74MfMLQ[/youtube]
In a SHTF scenario I believe so, the useful materials will be used to barter and metals would be high up on that list. Have a lot of round 50's and other fractional sizes as a 'just in case' measure so I can buy my $100 loaf of raisin bread with ease.
Smallest size of gold is a gram and even now that's about $50-$60 so might be a lot harder to break it down when trading for smaller items. Don't see things getting that bad but better to have it and not need it than to need it and not have it
[youtube]http://www.youtube.com/watch?v=eszz74MfMLQ[/youtube]
In a SHTF scenario I believe so, the useful materials will be used to barter and metals would be high up on that list. Have a lot of round 50's and other fractional sizes as a 'just in case' measure so I can buy my $100 loaf of raisin bread with ease.
Smallest size of gold is a gram and even now that's about $50-$60 so might be a lot harder to break it down when trading for smaller items. Don't see things getting that bad but better to have it and not need it than to need it and not have it
Could one say trade something for 1 gram of gold and get change in silver?
In a true SHTF scenario I really don't think gold or silver will be worth anything for the first couple of years until the shock is gone and people become more civil.
I would think food, water and some weapons of such to hoard off the rest of the unprepared people as being much more value during those times. A majority of the world is still on fiat.
I would think food, water and some weapons of such to hoard off the rest of the unprepared people as being much more value during those times. A majority of the world is still on fiat.
worldbubble
Active Member
silver is better than gold
I'd trade my 16 oz of silver for your 1 oz gold though
I'd trade my 16 oz of silver for your 1 oz gold though
I don't see how gold or silver will have any real value whatsoever in a true 'SHTF' scenario. Regardless of any industrial use, both are almost absolutely useless to the average person now - let alone to someone who is perhaps starving, dehydrated, injured/sick, without proper shelter and security, etc - and, if it is indeed a true 'SHTF' situation, industry will almost certainly be decimated, anyway (if industry is still chugging along, one can hardly say that the S has HTF - the infrastructure and logistics required for industry to operate are nothing short of mind-boggling). The most valuable and easily traded assets, perhaps, would be one's skills - those with good medical, management/organisational, scientific and trades skill sets would likely be in very high demand and these people will find little difficulty in exchanging their expertise and labour for what they need (which is not likely to be lumps of shiny metal).
Trading gold or silver for necessary items in a post-economic collapse/-apocalyptic/-holocaust/-zombie invasion world would thus not differ much from the use of fiat currency now. The exchange of something inherently useless (precious metal) for something useful (supplies, labour, shelter, knowledge) would be highly analogous to our current use of fiat currency; the metal would only be 'valuable' to the recipient because a large enough number of people have decided and agreed that it is. The metal itself would merely act as a token for the exchange and storage of wealth/value.
In such a situation, I also fail to see why those who actually do have stockpiles of necessary supplies would even want to exchange them for something that is of no use to them or those in their care for the foreseeable future (if it is clear that the situation will be resolved in some reasonable amount of time, then it is not really s 'SHTF' scenario, rather a 'crisis' scenario). Even if a person was to trade some of their supplies for some metal, then trade some of this metal for other supplies they need, this is, again, not direct trade of inherently valuable items, but simply a fiat currency in a (slightly) different form.
I understand that precious metals have an intrinsic value due to the labour, expertise and massive resources that go into extracting and refining them - but this would become irrelevant from the perspective of a post-'SHTF' scenario, where all that stored intrinsic value will likely seem a waste. If people desperately need things in order to survive, the measure of the value of in item is likely to be "what will this do to increase my chances of survival and how essential is it?" rather than "how much work went in to producing this?".
I'm certainly not saying that investing in precious metals is a bad idea. I most certainly don't think that; on the contrary, I think they are a promising investment. I just don't see them being of any use if things get genuinely out of hand and I'm curious to hear others' thoughts on this.
Trading gold or silver for necessary items in a post-economic collapse/-apocalyptic/-holocaust/-zombie invasion world would thus not differ much from the use of fiat currency now. The exchange of something inherently useless (precious metal) for something useful (supplies, labour, shelter, knowledge) would be highly analogous to our current use of fiat currency; the metal would only be 'valuable' to the recipient because a large enough number of people have decided and agreed that it is. The metal itself would merely act as a token for the exchange and storage of wealth/value.
In such a situation, I also fail to see why those who actually do have stockpiles of necessary supplies would even want to exchange them for something that is of no use to them or those in their care for the foreseeable future (if it is clear that the situation will be resolved in some reasonable amount of time, then it is not really s 'SHTF' scenario, rather a 'crisis' scenario). Even if a person was to trade some of their supplies for some metal, then trade some of this metal for other supplies they need, this is, again, not direct trade of inherently valuable items, but simply a fiat currency in a (slightly) different form.
I understand that precious metals have an intrinsic value due to the labour, expertise and massive resources that go into extracting and refining them - but this would become irrelevant from the perspective of a post-'SHTF' scenario, where all that stored intrinsic value will likely seem a waste. If people desperately need things in order to survive, the measure of the value of in item is likely to be "what will this do to increase my chances of survival and how essential is it?" rather than "how much work went in to producing this?".
I'm certainly not saying that investing in precious metals is a bad idea. I most certainly don't think that; on the contrary, I think they are a promising investment. I just don't see them being of any use if things get genuinely out of hand and I'm curious to hear others' thoughts on this.
gooby said:
Hi, good evening, and let me share some thoughts on this
Well put post, by the way, you explain your thinking quite well I think you've pretty much hit the nail on the head when you're talking about the "value" of precious metals and their use *during* a SHTF scenario. Whilst the actual crisis is on, those who have goods such as food and water will be unlikely to trade these goods for fiat, or gold, or silver, unless they purposely stored extra with the idea of trade in mind. This too, though, will all depend on the expected duration of such an event, something that won't be clear on the first day(s) but may become clearer as the event progresses.
That said, if you are preparing for a SHTF scenario, one (well, I at least) don't plan on using PM's to trade for food or water - those supplies I need to keep myself fed, and those I care for fed, are part of a separate preparation plan that has nothing to do with precious metals.
The true value of precious metals will be seen *after* the pieces are picked up from the SHTF event.
gooby said:
Again, absolutely correct in what you're saying here, except there's a factor you need to add to your thinking. After SHTF, mankind is still going to need a form of money (note, I said money, not currency!) with which to conduct economic trade. Mankind will also then be much more aware of the fact that it was the Keynsian based model, using debt created fiat currency, that got things to where they were when the SHTF, and people in general are much more likely to want to have a monetary system that cannot be conjured out of thin air like our current fiat currencies can be - and simply due to rarity and recognisability are likely to turn back to gold and silver as a means to introduce a new monetary system that cannot be subject to the whims of governments and central bankers.
This, by the way, is the main point of why gold and silver have been used as money for around 5000 years - their supply is limited, and it cannot be created into existence at will - and it is this very point that sets it aside as anything BUT analogous to the current system of fiat currencies.
gooby said:
True to a degree, but see my point above - a fiat system of conjured, backed-by-nothing, subject to creation at whim, inherently valueless currency =/= a truly rare precious metal
gooby said:
See my notes above on when I personally consider the true value of percious metals will be seen in a SHTF scenario (and yes, you're absolutely right, it won't be on the first day or two). The value in precious metals though, is not in the amount of time and labour and expertise it took in extracting and refining them - gold was recently selling for an amount below this figure due to what I believe was market manipulation... the value of precious metals is determined more so by their rarity I believe.
gooby said:
It's all about the timing, and what you do with them
I touch on most of that above, but the one thing I haven't touched on is the fact that I'm not planning to ever "sell" my stack (for currency), I plan on swapping out of these precious metals at the right time into other assets (what those assets are will be determined by the lay of the economic landscape at the time it's wise to swap out of precious metals, but I envisage real estate being one of the items on the list).ivan said:
As part of a SHTF prep?
Id say yes. Better to buy in now when u can afford to then waiting for a time when you dont have the funds. Worst case with PMs is that no matter what, they will hold SOME value where as fiat could become worthless.
As far as silver being used post SHTF, I would accept it as payment for any goods or services I was willing to part with as I see it as an easily transportable store of wealth.
I see this with both gold and silver, gold is like $100 notes and silver is everything else. You cant always get change for you $100 note. Silver will have its place as will gold. Instead of trying to carry around 1000oz of silver, those with that much may swap in for xx oz of gold and opposit during transactions.
Even in a extended worse case situation, people will need a store of wealth. You cant hang onto a crop of vegies for 6mths after you pick them as they go off but you can sell/swap them on harvest into something you can then exchange for goods and sevices at a later date when you need.
People will always need some form of currency, gold and silver have held that place for 1000's of years. You only have to look at some places in Africa and people are only accepting gold for goods due to inflation (and making a killing from it!)
Also things like tabacco, spirits, coffee. Read a good blog once of someone who lived through this and everyday items that become a luxury held a great amount of value, simple things like soap, shampoo, tampons, batteries and the list goes on. If you dont have a heap of money, buy books that explain how to hand make these items or others, you then have skills that you can sell or barter with forever at a later date. Also books about hunting, killing and butchering your own food, growing food, identifiying bush food, making spirits, stills, storing food and the list goes on. These books on how things were done before the world modenized sell cheap on ebay and dont take up much room and where as items can go off or run out, knowledge is priceless. A cheap and easy way to skill up if you dont already have a needed skill set. You dont even need to spend the time now learning how to do all these things, as long as you have a good reference how to book at the later date and a bit of a brain to work it out as you go.
As far as the 16:1 ratio, who knows.... if there is a world wide breakdown of fiat and everyone is trying to use PMs as currency it will naturally revert back to whatever the ratio of available silver to gold is. What that is, is anyones guess.
If it ever gets to that stage, my guess is 99% of us will have stopped caring and will just be trying to survive.
Other then a SHTF point, I still think silver will be THE investment over the next 15yrs. So IMO, either way, silver is a great investment.