Preppers: Hoarding Gold and Silver Is It A Good Idea
Right now, you know what gold and silver is worth. The value is set by supply and demand and by other economic factors, the strength of the dollar, for example. If a crisis is localized then it is likely that any money you have could be traded for goods and services. In the event of a worldwide or even nationwide collapse however, would money, whether it be gold, silver or dollars be worth anything, it is something worth thinking about.
Any number of reasons can affect the price of precious metals. Supply and demand of course defines the pricing for all commodities and it can change in seconds. Like any investment, people like to look to the future. Therefore, gold and silver pricing may be determined based on expected events in the future. Changes in interest rates, by the Federal Reserve, for example, can have an impact, and when the economic outlook is bleak precious metals generally tend to rise in value.
Paper money is essentially worthless on its face. Its only value right now is that you can trade it for something. Unlike gold and silver, paper money has no other use, it cannot be made into jewelry or used in manufacturing, and it is not even an acceptable substitute for toilet paper.
You received food at the grocery store and the store accepts your dollars in exchange. The same applies to any goods or services. What happens though, when there is nothing left that can be traded for your gold, silver and dollar bills? What happens when the goods and services are gone?
“Executive Order 6102” is a United States presidential executive order signed on April 5, 1933, by President Franklin D. Roosevelt The order “forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States”. “The order criminalized the possession of monetary gold by any individual, partnership, association or corporation”.
No need to go into the cost of ownership, you know what gold and silver costs, and if you have the resources then it may be an investment worth making. Investments for the most part should be long term however. Simply trading money now for gold and silver to be used later during a crisis is not an investment per say. You would never get you money back, but in some cases, those that believe their survival is dependent upon it, then yes it certainty is an investment worth making.
It is anybody’s guess as to whether the government would make it illegal to possess or hoard gold again. Now that the country is no longer on the gold standard it seems unlikely there would be a ban, but regardless do not advertise the fact you have any precious commodities.
Does It Make Sense to Stockpile Gold or Silver or Any Precious Stones
If the store shelves are empty, no amount of money will buy you bread or milk at the store. You can in the beginning use money, because people may not be aware of the gravity of the crisis, so many would be happy to take your gold at first. People will take your gold until food and water become scare, and then conceivably, food and water and other essentials would be the new currency.
If the world economy were to collapse then essentially gold and silver would be worthless for the time being. It may take years for a monetary system to be reestablished. In the meantime, however, you need to eat.
If you have, gold and silver then you would have to assume that a monetary system would be established after or even during a crisis, and if this were the case, then yes, gold and silver would have value. It could once again be traded for goods and services, but how long would this take.
If you have it, someone else will want it. Even if the power grid were to collapses it is imaginable that people would loot stores and still make off with electronics and other items that need electricity. This is humanity during a crisis. Whether money has any practical value or not a suitcase of it will still make people’s eyes widen and their palms sweaty, they will steal it if given the chance.
You have seen the doomsdays series where the family was hoarding silver. They made a practice of collecting coins and burying them. If this is what it takes for you to feel prepared then so be it, but do not forsake all else for the pursuit of lucre. Monetary gains are a noble pursuit, but remember, it is supply and demand. When supplies of food and water become low and the demand is high, then of course the prices will high be as well.
You may have several ounces of gold but a gallon of water and a series of antibiotics for a sick child would be worth more.
Of course, it all depends on what type of crisis you expect. If you believe in a total collapse of the dollar then precious metals will go up in price, but again, where will you be able to use them for trade, to “cash” them in if you will.
A financial collapse will still lead to empty store shelves, food and water shortages, and electrical disruptions and so on. It is not the disaster itself but the affects created because of the crisis. In the end, any major calamity will still produce the same results.
You simply do not know if gold and silver can be bartered with during a crisis. During a short-term crisis, money will have a real as well as a psychological value. In theory, the longer the crisis the less value gold and silver will have and the dollar will simply have no value at all, it cannot even be used for scribbling notes on.