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[Caput Lupinum]

I didn't see any silver or gold in the Mad Max movie. It seemed fuel, ammo, food and personal security/shelter were paramount.

Not to mention the cool tricked out cars and leather outfits


[youtube]http://www.youtube.com/watch?v=Vky3F36hoU0[/youtube]

 

[Byron]

Imo pms are good for an economic shtf scenario. Everyone else is thinking of an apocalyptic zombie shtf scenario.

There is a difference.

 

[gooby]

Thanks for your detailed and thoughtful reply.

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).

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.

Yes, I agree. A lot will depend on whether it seems likely that such a situation will have a foreseeable end (reasonably within one's own lifetime).

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.

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.

I definitely agree that a form of money would be needed for the world to run properly. It's just not practical to trade X,000 bags of wheat for a car or a gallon of water for a loaf of bread. Precious metals are definitely a good and sustainable way to do this when things are calm. I do wonder, though, how electronic transactions might work. These seem to negate some of the benefits of precious metals, but are quite necessary for large-scale trade, especially internationally. If trade was only to be done through the actual delivery of physical bullion as settlement of an account, it seems that the transport/shipping of precious metals between trading partners might be an incredibly profitable business

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.

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

Absolutely. I just meant that, during a 'SHTF' scenario, priorities would be so drastically different to what we are used to that the rarity of a metal (or of anything) will likely have no significance. Afterwards, of course, rarity will likely become important once again.

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?".

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.

I agree, again. I just meant that while the S is still being flung from the F, no-one is likely to care about the rarity if it's not going to increase their likelihood of still being alive tomorrow.

 

[gooby]

Imo pms are good for an economic shtf scenario. Everyone else is thinking of an apocalyptic zombie shtf scenario.

There is a difference.

Economic collapse would be a catalyst for many other crises.

Worthless treasury currency = no pay for doctors/police/military/judges/everyone else who keeps modern society running --> services and businesses coming to a grinding halt --> lawlessness/desperation --> fighting 'just because', as well as the perfect opportunity for various interested parties with little to lose and everything to gain to attempt to assert and establish dominance and take power. There would be no-one to stop them, aside from each other - this would not be a pretty sight. Economic collapse means total collapse of all of the institutions and supports that sustain modern society. This would not end with everyone sitting around a camp fire singing Kumbaya; this much should be apparent.

So, there might be a difference in the cause, yet little difference in the flow on effects and ultimate outcome.

 

[ivan]

if you invest in 100 dollars in cash and don't touch it for 20 years or keep silver for 20 years we know which will be worth more.

 

[Guest]

Because the GSR will eventually come back to 16 : 1 giving a much bigger percrntage of potential profit. Hopefully anyway.

Hi Ivan - there is no rational reason why this ^^^^^^ has to happen.

The silver/gold ratio in the ground is said to be around 9-12 : 1. If this is true then that's a rational reason.

 

[gooby]

if you invest in 100 dollars in cash and don't touch it for 20 years or keep silver for 20 years we know which will be worth more.

We do?

Please tell us more about this time machine / absolutely accurate future-predicting technology you have. It may well end up being worth far more than either cash or silver.

 

[Stark]

[youtube]http://www.youtube.com/watch?v=wgN1sLcAQnw[/youtube]

Steel isn't strong, boy, flesh is stronger!

What is steel compared to the hand that wields it?

 

[Byron]

Imo pms are good for an economic shtf scenario. Everyone else is thinking of an apocalyptic zombie shtf scenario.

There is a difference.

Economic collapse would be a catalyst for many other crises.

Worthless treasury currency = no pay for doctors/police/military/judges/everyone else who keeps modern society running --> services and businesses coming to a grinding halt --> lawlessness/desperation --> fighting 'just because', as well as the perfect opportunity for various interested parties with little to lose and everything to gain to attempt to assert and establish dominance and take power. There would be no-one to stop them, aside from each other - this would not be a pretty sight. Economic collapse means total collapse of all of the institutions and supports that sustain modern society. This would not end with everyone sitting around a camp fire singing Kumbaya; this much should be apparent.

So, there might be a difference in the cause, yet little difference in the flow on effects and ultimate outcome.

You are making a lot of assumptions which have no historical basis.

real life economic shtf crises including Zimbabwe, Serbia/Bosnia, Argentina, turkey, South American high inflation in the 80s and 70s, do not support your total collapse hypothesis. There was no total collapse or people eating each other. Even under nazi occupation which my grandparents lived through there was some form of central authority and law and order despite severe hardship and starvation.

I call bs on the zombie crap unless its an epidemic or a meteor strike. Its good to be prepared and self sufficient though.

 

[RT]

if you invest in 100 dollars in cash and don't touch it for 20 years or keep silver for 20 years we know which will be worth more.

We do?

Please tell us more about this time machine / absolutely accurate future-predicting technology you have. It may well end up being worth far more than either cash or silver.

Historicaly, Ivan is right. At 1 time $100 would have bought around 3oz of gold but at the same time, $100 was a good bit of money to have. But if you had hung onto the $100 in cash, it would have lost its buying power as more $ are printed.

PMs are a STORE of wealth, the only time there will be a true increase in wealth by holding PMs is when everyone is trying to store wealth in them at the same time and drive up the price due to no supply. And for that to happen, some really bad things must happen first.

What will happen in the future can only be guessed at but history is a good indication.

 

[gooby]

Imo pms are good for an economic shtf scenario. Everyone else is thinking of an apocalyptic zombie shtf scenario.

There is a difference.

Economic collapse would be a catalyst for many other crises.

Worthless treasury currency = no pay for doctors/police/military/judges/everyone else who keeps modern society running --> services and businesses coming to a grinding halt --> lawlessness/desperation --> fighting 'just because', as well as the perfect opportunity for various interested parties with little to lose and everything to gain to attempt to assert and establish dominance and take power. There would be no-one to stop them, aside from each other - this would not be a pretty sight. Economic collapse means total collapse of all of the institutions and supports that sustain modern society. This would not end with everyone sitting around a camp fire singing Kumbaya; this much should be apparent.

So, there might be a difference in the cause, yet little difference in the flow on effects and ultimate outcome.

You are making a lot of assumptions which have no historical basis.

real life economic shtf crises including Zimbabwe, Serbia/Bosnia, Argentina, turkey, South American high inflation in the 80s and 70s, do not support your total collapse hypothesis. There was no total collapse or people eating each other. Even under nazi occupation which my grandparents lived through there was some form of central authority and law and order despite severe hardship and starvation.

I call bs on the zombie crap unless its an epidemic or a meteor strike. Its good to be prepared and self sufficient though.

If there was no total collapse, then they are clearly not the sort of situation to which I refer. These were obviously regionally limited financial crises. I'm clearly talking about a worldwide, actual total economic collapse (which I clearly differentiated from a 'crisis' in an earlier post). What you're saying is akin to claiming that sawing one's arm off will not lead to significant blood loss because I got a paper cut on my finger and only lost a few drops - they are two very different things.

Of course there was some form of central authority and law and order during Nazi occupation. If there wasn't, it wouldn't be an occupation - that's the whole point. 'Awful central authority' is not the same as 'no central authority'.

I'm not saying that I think that anything like this is - or isn't - likely to happen, but this is what people seem to be talking about.

 

[gooby]

if you invest in 100 dollars in cash and don't touch it for 20 years or keep silver for 20 years we know which will be worth more.

We do?

Please tell us more about this time machine / absolutely accurate future-predicting technology you have. It may well end up being worth far more than either cash or silver.

Historicaly, Ivan is right. At 1 time $100 would have bought around 3oz of gold but at the same time, $100 was a good bit of money to have. But if you had hung onto the $100 in cash, it would have lost its buying power as more $ are printed.

PMs are a STORE of wealth, the only time there will be a true increase in wealth by holding PMs is when everyone is trying to store wealth in them at the same time and drive up the price due to no supply. And for that to happen, some really bad things must happen first.

What will happen in the future can only be guessed at but history is a good indication.

Ivan was not speaking historically, so his unsubstantiated prediction/claim is baseless. He did not say that precious metals have, historically, performed better than cash deposits.

if you invest [...] we know which will be worth more.

- not: if you had invested [...] we know which was worth more [in the end].

Note also the use of the word 'know'. We know what happened in the past; we do not know what will or will not happen in the future.

 

[Midnight Man]

I definitely agree that a form of money would be needed for the world to run properly. It's just not practical to trade X,000 bags of wheat for a car or a gallon of water for a loaf of bread. Precious metals are definitely a good and sustainable way to do this when things are calm. I do wonder, though, how electronic transactions might work.

You just have to wrap your brain around a new paradigm, and forget about this "currency" business that had ingrained itself into the way everyone thinks today (and I mean that in the gentlest, nicest way possible, I used to think in terms of currency too, and still do - but there is another paradigm)...

I have 17.324518 ounces of gold in my vault. I log on, and electronically transfer 0.025184 ounces to your vault. I just paid you $38.53 if you want to express that in current fiat AUD.

Solutions for this exist today, see Guardian Vaults if you're curious.

 

[hihosilver]

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:

:lol: it's like a massive circle and once a new crew joins the same old FAQ's come up but I suppose we too were once like that

 

[Eruaran]

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...

+1 for Mad Max reference.

 

[RT]

We do?

Please tell us more about this time machine / absolutely accurate future-predicting technology you have. It may well end up being worth far more than either cash or silver.

Historicaly, Ivan is right. At 1 time $100 would have bought around 3oz of gold but at the same time, $100 was a good bit of money to have. But if you had hung onto the $100 in cash, it would have lost its buying power as more $ are printed.

PMs are a STORE of wealth, the only time there will be a true increase in wealth by holding PMs is when everyone is trying to store wealth in them at the same time and drive up the price due to no supply. And for that to happen, some really bad things must happen first.

What will happen in the future can only be guessed at but history is a good indication.

Ivan was not speaking historically, so his unsubstantiated prediction/claim is baseless. He did not say that precious metals have, historically, performed better than cash deposits.

if you invest [...] we know which will be worth more.

- not: if you had invested [...] we know which was worth more [in the end].

Note also the use of the word 'know'. We know what happened in the past; we do not know what will or will not happen in the future.

Not going to get into a pissing contest over interpretation of meaning but by using 20yrs to quantify his statement, it seems he is drawing on historical data to look into the future. As in, past 20yr porformance is indication that it will be worth more. If it didnt have that, Id see your point. Regardless, Predictions are exactly that... predictions. Opinions put into words.

Just my 2 cents, that historicaly his statement makes sense, not a statement of fact as Im not in Ivans head nor like everyone else on here can I see into the future. At the end of the day, both sides are only and will ever only be opinions. So really a moot point to have an internet arguement over.

 

[PAGAU]

Paper doesn't beat rock over time..