PMs during a crisis...

lkenefic

So, legitimate question here. Exactly what is the reasoning behind stacking PMs specifically for a crisis? I understand that in a traditional (ie... normal) economy that they're viewed as somewhat a hedge against inflation and even during a crash, physical gold or silver can be converted to cash, but what happens if these normal exchanges aren't functional? Is my Morgan silver dollar going to be worth just $1? Would someone accept $1 silver for food or TP? Would 1 Oz of silver shoot up to $50 and be worth that amount of groceries? In a barter economy, how much are PMs really "worth"?

blitzdude

They just pulled $2.2T fake paper dollars out of thin air. A stacker believes someday all that thin air debt will need to be repaid. After the default casino bankruptcy your paper dollars will be completely worthless aka Zimbabwe Dollars. At which time you will be happy you decided to hold some PM's.

hchcoin

If your fiat money becomes worthless, gold and silver should retain its value with the new money that replaces it. For example, if the U.S. dollar becomes worthless and is replaced by a new world currency, precious metals will still hold value, your old U.S. dollars will not. Hyperinflation during the early 1900's led German money to be worth more in a fire to heat a home than it was to buy anything. If someone held gold instead, it would have retained its value. The history of gold and silver as insurance against many forms of financial and political collapse have been going on for thousands of years.

shorecoll

I thought if you offer a zombie silver, he won't eat your brains?

BryceM

After it's all said & done, physical assets will theoretically retain value. Exchanging them for anything you need won't really be so easy until things settle down and people have something they're willing to give up.

True "preppers" will emphasize food processing & storage, fuel, fiat currency, metals, real estate, survival gear, a program of mental and physical fitness, medical supplies, weapons/ammo/booze/cigarettes (easily exchanged for other stuff you might need), and communication equipment.

Or, you could just buy toilet paper and cleaning supplies.

Sonorandesertrat

@blitzdude said:
They just pulled $2.2T fake paper dollars out of thin air. A stacker believes someday all that thin air debt will need to be repaid. After the default casino bankruptcy your paper dollars will be completely worthless aka Zimbabwe Dollars. At which time you will be happy you decided to hold some PM's.

The new debt will not be repaid by stackers, it will be repaid (if ever) by their children and grandchildren).

50cCOMMEMGUY

I’ve always believed if cash ceases to be accepted metals will be as useless. If we’re truly at the point of a complete and total economic collapse what will become important is what can be eaten, drank, worn, sheltered, or whatever can be used to create or take the above by force.
Metal value will likely come at a later point if we even make it there. One of the redeeming qualities of hypothetical shows like TWD is the display of a purely barter society after a collapse. Yes it’s fiction but replace the zombies with foreign invaders, sickness, nuclear winter, etc... and you may find the same result. You can’t eat metals and jewels.

jmlanzaf

@50cCOMMEMGUY said:
I’ve always believed if cash ceases to be accepted metals will be as useless. If we’re truly at the point of a complete and total economic collapse what will become important is what can be eaten, drank, worn, sheltered, or whatever can be used to create or take the above by force.
Metal value will likely come at a later point if we even make it there. One of the redeeming qualities of hypothetical shows like TWD is the display of a purely barter society after a collapse. Yes it’s fiction but replace the zombies with foreign invaders, sickness, nuclear winter, etc... and you may find the same result. You can’t eat metals and jewels.

THIS!

Gold/silver are just a lazy person's survival pack. People really trying to survive an economic collapse have more useful supplies. I guarantee that if you have the last case of canned hash in town, there is no amount of gold or silver that will get you to part with it.

291fifth

Most people get along very well with no gold or silver. Try and pay your credit card bill with it and see what happens.

lkenefic

I recall stories from my father after WWII stationed in Frankfurt (then) W. Germany. How the locals would literally bring wheel-barrows full of Marks to buy a dozen eggs and a loaf of bread... if it was even available. Obviously, a war is a huge disruption... I think our current situation could be as economically disruptive but without the bombed out buildings. I think "stacking" PM's is a fairly recent phenomenon. I was just wondering what the expectations would be in some future transaction.

thefinn

When China announces that they have 20,000 tons of gold (12,000 more than the US), which currency will be the world's reserve currency? Then all of that paper with dead presidents on it will be flying home to roost.

thefinn

No, but perception is reality. People think paper gold and silver is the same as physical.

Moxie15

if one was to read or speak with someone who has been through times when it all falls apart silver and gold are hardly mentioned. The currency of choice becomes foodstuff and especially 'vice' foods. Alcohol, chocolate, coffee, and the like.
Years ago I read an account of a fellow who was stuck in the middle of the 'little Serbian argument', he wrote that a good bottle of vodka could get you just about all the ammunition, or food you could carry.

Maybe we should all be stacking cases of Grey Goose

ricko

It is true, you cannot eat gold or silver. However, as in all times of crisis, someone will be trying to take advantage of opportunities.... Thus, those with lots of food etc., will trade (barter) for the value that gold has always had...Most realize that bad times do not last forever, so plan to come out ahead when the good times arrive. Yes, one must also survive the bad time to get there....so, as a wise man once said - Prior Planning Prevents Piss Poor Performance (the venerable six P's). Cheers, RickO

PerryHall

The collapse of an economy is eventually followed by a time of stability and normalcy. Do you want to be left holding gold or paper money which may have lost considerable value?

keets

when I worked at the Coin Shop I had similar conversations with some guys who were "stacking" and almost relished the thought of a collapse as justification for what they were doing. I would reach into my pocket and pull out some greenbacks, telling them that when they are worthless the Silver won't save them. nobody ever had a really good reply.

JMHO, the thought that the World economy will crash and you'll be able to buy things with Silver bars is laughable. stack on, Garth.

ReadyFireAim

I'm stockpiling popcorn

JimTyler

You can always use dollars 💵 as toilet paper 🧻

PerryHall

@keets said:
when I worked at the Coin Shop I had similar conversations with some guys who were "stacking" and almost relished the thought of a collapse as justification for what they were doing. I would reach into my pocket and pull out some greenbacks, telling them that when they are worthless the Silver won't save them. nobody ever had a really good reply.

JMHO, the thought that the World economy will crash and you'll be able to buy things with Silver bars is laughable. stack on, Garth.

No one would ever try to spend a 100 oz silver bar or a gold double eagle at the local grocery store. LOL. Once things stabilized, you would sell it for whatever new currency replaced the old currency and use that to go shopping. That's what the Germans who had some gold coins did in the Weimar Republic after their currency collapsed. I can't think of a single time in world history when gold or silver was totally worthless. I can think of many times when government issued paper money did become worthless including twice in this country's history (the Continental Currency during and soon after the Revolutionary War and the paper money being held in the southern states after the Civil War).

mustangmanbob

Normal Day or Zombie Apocalypse, people who need something have to give up something.

Normal day, it is dollars in the United States, be it a credit card swipe, Apple day, wad of greenbacks, inconvenienced electrons flowing through electronic systems. Everybody understands it, 99.9% of people accept it. The exchange rate is posted ( 18 ounce Box of Frosted Flakes is $2.49)

Zombie Apocalypse: What is the unit: Toilet Paper, canned goods, silver and gold, ammo, ???. How is "value set: Is one can of peaches worth 2 rolls of Charmin? Without agreement, nothing happens.

So, for the PM crowd: Something has to be "common" enough to be utilized, so people "know" what it is and what it's value is. If ALL the silver in the world were turned into dimes, being as there is about 4 billion ounces of silver, and roughly 7 billion people, and a dime weighs about .08 ounces, it would work out to about 7 dimes per person. Gold falls below 1 dime per person. So how does the world function on 7 dimes per person. Even if the silver was alloyed down to the last Mexican silver Peso (10%) it is barely over a roll per person.

sellitstore

Corn, Beef, Sheep's Wool or Sole Leather. This money gives exchange rates for all.

jmlanzaf

@thefinn said:
When China announces that they have 20,000 tons of gold (12,000 more than the US), which currency will be the world's reserve currency? Then all of that paper with dead presidents on it will be flying home to roost.

This is a circular argument. You think that currency needs to be backed by gold, so you think the currency with the most gold backing matters.

Currency is backed, 1st and foremost, by the faith of the public. How much faith does anyone have in the Chinese currency? No one believes their coronavirus numbers. Why would anyone believe their economic numbers?

Currency is also backed by the underlying economic assets of the entire country, not just gold. What is the total value of ALL Chinese assets, not just gold, and ALL U.S. assets?

jmlanzaf

@mustangmanbob said:
Normal Day or Zombie Apocalypse, people who need something have to give up something.

Normal day, it is dollars in the United States, be it a credit card swipe, Apple day, wad of greenbacks, inconvenienced electrons flowing through electronic systems. Everybody understands it, 99.9% of people accept it. The exchange rate is posted ( 18 ounce Box of Frosted Flakes is $2.49)

Zombie Apocalypse: What is the unit: Toilet Paper, canned goods, silver and gold, ammo, ???. How is "value set: Is one can of peaches worth 2 rolls of Charmin? Without agreement, nothing happens.

So, for the PM crowd: Something has to be "common" enough to be utilized, so people "know" what it is and what it's value is. If ALL the silver in the world were turned into dimes, being as there is about 4 billion ounces of silver, and roughly 7 billion people, and a dime weighs about .08 ounces, it would work out to about 7 dimes per person. Gold falls below 1 dime per person. So how does the world function on 7 dimes per person. Even if the silver was alloyed down to the last Mexican silver Peso (10%) it is barely over a roll per person.

well illustrated

jmlanzaf

@PerryHall said:

@keets said:
when I worked at the Coin Shop I had similar conversations with some guys who were "stacking" and almost relished the thought of a collapse as justification for what they were doing. I would reach into my pocket and pull out some greenbacks, telling them that when they are worthless the Silver won't save them. nobody ever had a really good reply.

JMHO, the thought that the World economy will crash and you'll be able to buy things with Silver bars is laughable. stack on, Garth.

No one would ever try to spend a 100 oz silver bar or a gold double eagle at the local grocery store. LOL. Once things stabilized, you would sell it for whatever new currency replaced the old currency and use that to go shopping. That's what the Germans who had some gold coins did in the Weimar Republic after their currency collapsed. I can't think of a single time in world history when gold or silver was totally worthless. I can think of many times when government issued paper money did become worthless including twice in this country's history (the Continental Currency during and soon after the Revolutionary War and the paper money being held in the southern states after the Civil War).

Both of those examples involved the collapse of governments.

Gold and silver can easily become worthless if the government simply bans their use as a medium of exchange. That almost happened in 1933.

ReadyFireAim

The prohibition against owning gold wasn’t uplifted until 1974.
It wasn't exactly worthless before that.

keets

at the point of the Apocalypse there will be two mediums of currency, the barter system and criminality. also, since a probable majority of Americans are ignorant about our circulating coinage I think it strains credulity to see a time when the citizenry would even know what Gold and Silver is. they are routinely duped in the present day.

Weiss

There are people who pray for the zombie apocalypse because they've never had much. And the few ounces of silver they've been able to set aside might actually put them on top for once.

And there are people who pray for the zombie apocalypse so they can feel superior to those guys because they don't think that bar of silver will buy corn flakes or toilet paper when nobody wants to sell their corn flakes or toilet paper. They didn't bother to save a few ounces of silver, so they'll rejoice when those who did still have nothing.

Then there are those of us who saw the images of people buying bread in Berlin with wheelbarrows full of worthless paper currency in their high school history books, and it actually made an impact. And there are people who looked deeper and found that post-war Hungary made Germany look prosperous, when its peak month rate of inflation (July 1946) was 41.9×10^15 percent and all the currency in the entire country was valued at 1/1000th of a U.S. cent.

And though something that happened to 1st world countries, with scientists, artists, world class universities and an educated populace in the middle of the 20th century could never, ever, ever happen to us here whole decades later, maybe some of us saw the Vietnamese boat people land on our shores without being able to speak our language, with no social network, malnourished, terrified, and with nothing to their name but the clothes on their backs and a thin brown paper wrapper printed in red with the words Kim Thanh Or Pur hidden in each shoe.

So when, in the midst of a global pandemic, the stock market drops by 30%, the economy grinds to a halt for 6 or 8 months, and the government injects well over $2,000,000,000,000 of fiat currency into the market, what good will that ounce of gold do?

It might do nothing.

But there are those of us "stackers" who have sought to preserve a portion of our wealth even during (possibly because of) an unprecedented inflation in the "value" of paper assets because they did pay attention to history in high school. Rapid deflation or hyperinflation? Stagflation? Those events may not make us zillionaires. But our ounces of gold might help keep us from losing our home. They might keep the lights on and food on the table. They might even let us sleep at night knowing if someone in our family gets sick, they might be able to pay the hospital bill or at least fill some prescriptions.

ReadyFireAim

@Weiss said:...nothing to their name but the clothes on their backs and a thin brown paper wrapper printed in red with >the words Kim Thanh Or Pur hidden in each shoe.

Had to look that one up...Wow (sorry for the caps, it is click & paste)

FAMOUS THROUGHOUT SOUTHEST ASIA BEFORE AND DURING THE VIETNAM WAR, THESE BARS WERE USED BY REFUGEES FLEEING VIETNAM AND CAMBODIA TO ESCAPE THE COMMUNISTS. MANY REFUGEES ESCAPED BY BOAT, SAILING INTO THE SOUTH CHINA SEA IN HOPES OF BEING RESCUED BY THE U.S. NAVY, AND EARNING THEM THE EPITHET OF "BOAT PEOPLE". A SIGNIFICANT NUMBER HAD TRANSFERRED THEIR LIFE SAVINGS FROM CURRENCY TO KIM-THANH BARS, SOME EVEN SEWING THEM INTO THE LINING OF THEIR CLOTHING, TO KEEP THE GOLD SAFE, AND TO HELP THEM REBUILD THEIR LIVES ON FOREIGN SHORES.

https://www.rarecoincollector.com/1955-1975-GOLD-VIETNAM-ORIGINAL-KIM-THANH-BARS-AND-WRAPPER/

jmlanzaf

@ReadyFireAim said:
The prohibition against owning gold wasn’t uplifted until 1974.
It wasn't exactly worthless before that.

I said "almost".

You could not, however, have openly paid bills with it in the U.S.

jmlanzaf

@keets said:
at the point of the Apocalypse there will be two mediums of currency, the barter system and criminality. also, since a probable majority of Americans are ignorant about our circulating coinage I think it strains credulity to see a time when the citizenry would even know what Gold and Silver is. they are routinely duped in the present day.

This is sadly probably true. Could you imagine the average citizen trying to figure out how much gold to trade for a loaf of bread?

jmlanzaf

@Weiss said:
There are people who pray for the zombie apocalypse because they've never had much. And the few ounces of silver they've been able to set aside might actually put them on top for once.

And there are people who pray for the zombie apocalypse so they can feel superior to those guys because they don't think that bar of silver will buy corn flakes or toilet paper when nobody wants to sell their corn flakes or toilet paper. They didn't bother to save a few ounces of silver, so they'll rejoice when those who did still have nothing.

Then there are those of us who saw the images of people buying bread in Berlin with wheelbarrows full of worthless paper currency in their high school history books, and it actually made an impact. And there are people who looked deeper and found that post-war Hungary made Germany look prosperous, when its peak month rate of inflation (July 1946) was 41.9×10^15 percent and all the currency in the entire country was valued at 1/1000th of a U.S. cent.

And though something that happened to 1st world countries, with scientists, artists, world class universities and an educated populace in the middle of the 20th century could never, ever, ever happen to us here whole decades later, maybe some of us saw the Vietnamese boat people land on our shores without being able to speak our language, with no social network, malnourished, terrified, and with nothing to their name but the clothes on their backs and a thin brown paper wrapper printed in red with the words Kim Thanh Or Pur hidden in each shoe.

So when, in the midst of a global pandemic, the stock market drops by 30%, the economy grinds to a halt for 6 or 8 months, and the government injects well over $2,000,000,000,000 of fiat currency into the market, what good will that ounce of gold do?

It might do nothing.

But there are those of us "stackers" who have sought to preserve a portion of our wealth even during (possibly because of) an unprecedented inflation in the "value" of paper assets because they did pay attention to history in high school. Rapid deflation or hyperinflation? Stagflation? Those events may not make us zillionaires. But our ounces of gold might help keep us from losing our home. They might keep the lights on and food on the table. They might even let us sleep at night knowing if someone in our family gets sick, they might be able to pay the hospital bill or at least fill some prescriptions.

And...they might not. That's kind of the point. There's no harm in owning gold, but there's also no guarantees.

A government that needs you to accept its paper can easily criminalize the use of gold. Pretty simple way to preserve the usefulness of your currency...at the end of the barrel of a gun, of course. In that case, all the gold in the world won't keep your lights on or food on the table.

I also don't see how gold is at all useful as a hedge against deflation.

topstuf

When I first opened the shop, i was ....buying.... gold from Viet refugees.
They told me that without gold they would have been kicked off the boat.

They converted their "flight money" to local currency.
And thrived.

There's a lesson there. Gold is ...."SALABLE" ....everywhere. Make a note.

topstuf

Ooooohhhhh...NOOO!
CRIMINALIZATION !!!! ooooh. Just like alcohol, huh?

BAJJERFAN

@PerryHall said:
The collapse of an economy is eventually followed by a time of stability and normalcy. Do you want to be left holding gold or paper money which may have lost considerable value?

Gold is pretty much Yuseless for everyday transactions unless it's converted to paper/digital money. How many pounds of potatoes could a tenth ounce AGE buy? You need smoe sort of system to place a value on your PMs.

crazyhounddog

@ricko said:
It is true, you cannot eat gold or silver. However, as in all times of crisis, someone will be trying to take advantage of opportunities.... Thus, those with lots of food etc., will trade (barter) for the value that gold has always had...Most realize that bad times do not last forever, so plan to come out ahead when the good times arrive. Yes, one must also survive the bad time to get there....so, as a wise man once said - Prior Planning Prevents Piss Poor Performance (the venerable six P's). Cheers, RickO

Who says you can’t eat silver?

DRUNNER

Alas, Babylon . . . . by Pat Frank.

I teach it in school . . . . . . .

Drunner

blitzdude

@keets said:
at the point of the Apocalypse there will be two mediums of currency, the barter system and criminality. also, since a probable majority of Americans are ignorant about our circulating coinage I think it strains credulity to see a time when the citizenry would even know what Gold and Silver is. they are routinely duped in the present day.

I never imagined I would be running around trading silver dimes for cans of beans.

I believe the scenario would go, massive debt, hyperinflation followed by complete collapse of the USD. The system eventually gets reset to some new form of currency. You can trade in your old USD for this new currency but sorry, they only have a tiny fraction of the value they once had before the collapse. Gold and silver will still be gold and silver.

Insider2

I wonder if I could sell this old body of mine for something.

keets

Alas, Babylon . . . . by Pat Frank.

I remember reading that as part of our curriculum almost 50 years ago. I enjoyed it and have thought many times over the years of re-reading it. not much can still come to memory, what sticks is the guy who always looking around with binoculars for parakeets and the one woman thought he was a peeper.

is that right or s my memory faulty?? I also remember that the one guy had a special code he'd use when he called his wife to alert her of trouble. I think I need to read it again.

lkenefic

@keets said:
at the point of the Apocalypse there will be two mediums of currency, the barter system and criminality. also, since a probable majority of Americans are ignorant about our circulating coinage I think it strains credulity to see a time when the citizenry would even know what Gold and Silver is. they are routinely duped in the present day.

Exactly. So, if I have a couple of Franklin half dollars, I'm going to be hard pressed to convince someone that: it's worth more than the "half dollar" that's written on the coin; that's it's silver; and that they should exchange their loaf of bread or whatever for them...

I think I'd have an easier time trading bullets for bread... but then I'd be running the risk of getting robbed for my bread... now that I've traded away ammo! ;-)

jmlanzaf

@Insider2 said:
I wonder if I could sell this old body of mine for something.

Do you have gold teeth?

jmlanzaf

@lkenefic said:

@keets said:
at the point of the Apocalypse there will be two mediums of currency, the barter system and criminality. also, since a probable majority of Americans are ignorant about our circulating coinage I think it strains credulity to see a time when the citizenry would even know what Gold and Silver is. they are routinely duped in the present day.

Exactly. So, if I have a couple of Franklin half dollars, I'm going to be hard pressed to convince someone that: it's worth more than the "half dollar" that's written on the coin; that's it's silver; and that they should exchange their loaf of bread or whatever for them...

I think I'd have an easier time trading bullets for bread... but then I'd be running the risk of getting robbed for my bread... now that I've traded away ammo! ;-)

Well, since you have ammo, you can just take the bread.

There's a limit to the safety net PMs allegedly provide. In times of hyperinflation, someone will need to convince me with very hard-core math models that PMs will inflate in value any more than the stock market. So, I'm not even convinced that PMs are an effective hedge against inflation much less actual systemic collapse.

Weiss

PMs don't inflate in value. Their value stays stable while everything else devalues.

lkenefic

So, in essence, I'd likely be better off stacking cans of Campbell's soup than PM's... at least in the short term... after economic collapse.

topstuf

@lkenefic said:
So, in essence, I'd likely be better off stacking cans of Campbell's soup than PM's... at least in the short term... after economic collapse.

Be sure to mention them in your will.

Insider2

@jmlanzaf said: "Well, since you have ammo, you can just take the bread."

I don't suggest trying to take bread from some folks.

@lkenefic said: "So, in essence, I'd likely be better off stacking cans of Campbell's soup than PM's... at least in the short term... after economic collapse."

Sounds like it. What kind of soup would bring the most return on investment?

lkenefic

@Insider2 said:

@lkenefic said: "So, in essence, I'd likely be better off stacking cans of Campbell's soup than PM's... at least in the short term... after economic collapse."

Sounds like it. What kind of soup would bring the most return on investment?

lol... yeah, everyone likes Chicken Noodle, but I'd be hard pressed getting rid of my Cream of Mushroom! ;-)

lkenefic

@jmlanzaf said:

I think I'd have an easier time trading bullets for bread... but then I'd be running the risk of getting robbed for my bread... now that I've traded away ammo! ;-)

Well, since you have ammo, you can just take the bread.

I'd likely be keeping 22LR, 9mm, 45ACP, .223, .308, and 7.62x39... but I don't have a wheel gun any more and the .357 mag might be good to trade... ;-)

crazyhounddog

I have bread, bullets and silver. I might be the richest man, ever.

Weiss

@lkenefic said:
So, in essence, I'd likely be better off stacking cans of Campbell's soup than PM's... at least in the short term... after economic collapse.

Maybe I shouldn't be so quick to use allusion. Or maybe my response was just too long and boring.

In a nutshell:

For perhaps 95% of the time, when there's an economic event ranging from the loss of your own job to a deep global depression, having a percentage of your portfolio in precious metals offers you incredibly portable, shelf-stable, discrete, liquid wealth.

In that 5% of the time when all societal and economic standards break down and you're cowering in your basement with no heat, no electricity, and the Nazis or the martians are patrolling the street looking for target practice, then yeah: Your can of soup will have more value than an ounce of silver.

You know what I've learned? You can't convince people to stack precious metals if they've already convinced themselves not to stack precious metals. Just like you can't convince some people to buy life insurance to protect their wife and kids, and you can't convince some people to save money for their kids' education.

Always seems to be the same people in that group.