Lets say the world monetary system came crashing down....................................

BigE · December 19, 2003 5:37AM

Do you envision people ever using a silver dime or a 20.00 gold piece as a means of barter should paper money become worthless? Would people crack out their MS 63 PCGS common date Saints and chip off a piece to buy a loaf of bread?

, Are people who hoard precious metals to survive doomesday simply barking up the wrong tree?-----------------------BigE

dlimb2 · December 19, 2003 5:40AM

Good question,I have thought the same thing.

paigowjohnny · December 19, 2003 5:40AM

Luckily you're a tree and don't have to worry about such things

My humble opinion...folks who are hoarding precious metals better have a good exit strategy. Eventually the economy is gonna come back...eventually the stock market will be in sustainable upward move...and the gold bugs and metal hoarders are gonna watch profits(or initial investments if bought recently) get chipped away...

dlimb2 · December 19, 2003 5:48AM

I have heard stories about World War 2, women with mink furs and diamonds on their finger digging in trash cans for food to eat. I dont think gold nor silver, minks nor diamonds in a total collapse of the monitary system could buy you a piece of bread to eat. Sunshine, water and oxygen are the the greatest things which allow man to exist...with these elements and a piece of land, man could learn to survive on his own.

baccaruda · December 19, 2003 6:00AM

Hmm, the money system has crashed - would I accept a tiny sliver of silver in exchange for food? You'd be hard-pressed to find someone who would.

I suppose if you gave me enough gold or silver to make a pot, it would be worth something.

LAWMAN · December 19, 2003 6:04AM

Fleeing Europe before and during WWII people sewed diamonds into their clothes or swallowed them or inserted them a la suppository. Gold was the king during the Wiemar republic's problems in the 20's when you needed a wheelbarrow full of marks to buy bread, assuming anybody would sell it to you.

You pose an interesting question. I've got to think that gold, silver and platinum are going to be important, but so are guns, ammo, medical supplies, food and water. Depends how bad it gets. In the meantime, hang on to your buillion, and keep your powder dry.

JoyofCollecting · December 19, 2003 6:16AM

In times of financial crisis during the last 3,000 years......precious metals have always served as a valid means of exchange.

My father-in-law was an extremely wealthy man in pre-War Germany. He saw it all collapse in a short period of time and was forced to trade family jewelry to farmers for food to feed his family. Along with gold and silver coins....jewelry made from precious metals and gems was an accepted means of exchange.

After escaping East Germany with his family and re-establishing his business internationally, he always kept a healthy supply of gold bullion in the safe deposit box so that he could always feed his family if his society experienced financial collapse again.

We've been very blessed to have avoided financial collapse for as many decades as we have. Let's all continue to hope and pray that it never does happen. But if it does.....it would be nice to have some preparation.

abuell · December 19, 2003 6:59AM

<< 
After escaping East Germany with his family and re-establishing his business internationally, he always kept a healthy supply of gold bullion in the safe deposit box so that he could always feed his family if his society experienced financial collapse again. >>

I always get a chuckle when gold and silver are touted as a hedge against the effects of a total economic collapse. The real point is that while paper money became virtually worthless, your father in law's gold and silver plummeted in value too - just not as much. What rose in value was that farmer's food. If one believes in the eventual collapse of the monetary system and wants to invest in commodities to protect themselves, screw the stupid gold and silver, ya can't eat metal. Buy pork bellies, wheat, corn, or anything else edible - that's what logic dictates would rise in price under those circumstances.

MrEureka · December 19, 2003 7:09AM

Do you envision people ever using a silver dime or a 20.00 gold piece as a means of barter..?

It's probably inevitable in the long run, but very unlikely in our lifetime. Sure, sock some metal away as insurance, but don't get too carried away.

JoyofCollecting · December 19, 2003 7:12AM

Abuell:

You are correct about the relative value of food soaring.....relative to all other assets both paper and hard. However, with precious metals one will be able to buy land, a tractor, temporary food, diesel and seed.

However, there are financial crises where the value of land and food plummet. A good example is the Great Depression. Land prices and food prices plummetted. In fact, there was an oversupply of fresh food during the Great Depression and many farmers destroyed tons of crops in order to try to force prices higher. However, silver and other precious metals retained their value. While we might experience total financial collapse, we are more likely to experience a partial financial collapse similar to the Great Depression.

In a partial collapse, precious metals will retain a huge portion of their value. In a total collapse, precious metals will allow you to purchase the assets necessary to achieve survival.

Therefore IMHO, precious metals represent a solid compromise for the vast majority of urban Americans to hedge against a likely partial financial collapse and a remotely possible total financial collapse.

MrEureka · December 19, 2003 7:13AM

Buy pork bellies, wheat, corn, or anything else edible - that's what logic dictates would rise in price under those circumstances.

Good strategy if you think collapse is around the corner. Long term, I don't think I want to stash any pork bellies in my mattress.

(On that last point, my dog, Aki, might disagree.)

Dollars · December 19, 2003 7:16AM

I guess what it comes down to is can you live off the land. Can you hunt, fish, grow things. Maybe you should be hoarding seeds!

Lakesammman · December 19, 2003 7:29AM

A old friend, a vet of the Hungarian revolution, told me that tobacco and ammunition were the most valuable commodities during those times. They keep better than pork bellies. If you have enough ammo, the food can be obtained.

bulloncoins · December 19, 2003 7:37AM

As to the crash of all crashes.........I think its a matter of faith.

Revelation 6:6

What do you believe in? Act on your own beliefs. Personally I hope to be long gone by the time it gets here. Let someone else try to eat of loaf of bread while millions starve. I would choke on it.

paigowjohnny · December 19, 2003 7:45AM

<< What rose in value was that farmer's food >>

Like Redfield hoarding food in his basement along with all his silver....

Coulport · December 19, 2003 7:56AM

The dollar has had 95¢ wrung out of it. They are trying to get rid of the last 5¢.
Might not be a bad idea to have some silver and gold.

What that we are supposed to store according to the survivalists? Gold, Guns, Groceries?

sumnom · December 19, 2003 8:00AM

I met a man who escaped from North Korea to South Korea just before the Korean War. He had to bribe his across the border with bags of gold dust.

elwood · December 19, 2003 8:06AM

Better have a peice of land, a set of Foxfire books and learn how to provide for yourself.

MrEureka · December 19, 2003 8:22AM

The dollar has had 95¢ wrung out of it. They are trying to get rid of the last 5¢.

Coulport - Who are "they"?

Newmismatist · December 19, 2003 8:35AM

<< Buy pork bellies, wheat, corn, or anything else edible - that's what logic dictates would rise in price under those circumstances.

Good strategy if you think collapse is around the corner. Long term, I don't think I want to stash any pork bellies in my mattress.

(On that last point, my dog, Aki, might disagree.)

>>

ROTFLMAO

BTW, those commodities that were reccommended are pieces of paper also - giving someone the right to take delivery of what ever the piece of paper says - In the type of economic crises contemplated, those pieces of paper might be just as worthless as your paper money. In those circumstances, what we think is valuble may pale in comparison to what is necessary for survival.

fishcooker · December 19, 2003 9:17AM

Probably the most valuable thing would be guns 'n ammo to protect your other valuables - blankets, water, shelter, and food.

fivecents · December 19, 2003 9:25AM

<< Do you envision people ever using a silver dime or a 20.00 gold piece as a means of barter should paper money become worthless? >>

I remember in the movie "Young Guns" someone made some 12 gauge shotgun shells filled with silver dimes instead of buckshot.

Bear · December 19, 2003 9:35AM

In such a situation, Lead will be the medium of exchange.

Put that lead to work in a good handgun and food is there for

the taking.

SportsModerator · December 19, 2003 9:37AM

Barter will be the name of the game. I forsee a brisk trade in pez dispensers and bear skins

roadrunner · December 19, 2003 1:46PM

Physical possession will be the name of the game. How many pork bellies can you keep under your mattress? Wheat and soy are easier to keep. Cans of tuna are a good bet too.

Guns, dry groceries, and other basic consumables will be needed.
Having silver and gold coins won't hurt ya. If they become worthless only your six shooter is gonna work. Gold stocks went up a factor of 6 during the last depression. Gold did ok too holding its own. Real estate plummeted too.

roadrunner

cladking · December 19, 2003 2:56PM

A panic today would be far different than anything which has occured in the past. Food today
comes from factories and most people specialize to such a degree that they don't have the
skills to function in an economy which no longer provides the basic necessities. There are far too
many people to live off the land today in any case.

Any way you look at this there would be no value to precious metals and great upheaval.

Fortunately such a scenario is highly unlikely, and more importantly, becoming less likely with time.

islemangu · December 19, 2003 7:27PM

what Chicken Little says

Neptune · December 19, 2003 9:09PM

BullonCoins - Let someone else try to eat of loaf of bread while millions starve.

That is actually happening now, in today's world.

PM could also be used to pay taxes on land.

Was curious if anyone has any input - what would this situation with economy do to government bonds?

FC57Coins · December 19, 2003 10:32PM

You know - you don't have to go back into ancient history to find an example of this. I was reading an old issue of the Numismatist from 1949 and a contributor of the time was recounting how when the Philipines were taken over by the Japanese, many collections were literally "spent" trying to get food. It was a sad story but one which explains the realities of life. One thing the story mentioned was that this is one of the reasons why it's difficult to find some Philipine issues in uncirculated condition.

monsterman · December 19, 2003 10:41PM

i think if you had 50,000 worth of bullets rather than silver coins you would have more stroke in the new world

monsterman

oreville · December 19, 2003 11:12PM

monsterman! Nice to see you here again! I got your pm.

I personally think a balanced approach of storing some water, canned tuna and vegetables, a couple of silver coin bags and a few gold coins, some bullets and a rifle with a mortgage (or better yet no moprtage) that is prepaid a few months might give you the best chance of riding out a crisis.

No one approach works best since we never know what kind of financial crisis we will ever face.

In August 1971, when Richard Nixon took the US off the international gold standard, I was in Cape Breton Nova Scotia, Canada on a bike (non motorized kind). Our US dollars were suddenly worthless. Canadian banks refused to exchange them into Canadian $. We ran out of Canadian in 2 days. We were literally BEGGING for American tourists to exchange a dollar here and a dollar there from US to Canadian so we could literally eat.

I remember having to scrounge literally for food. It was the most frightening experience I ever went through. It lasted one week before things calmed down. I never forgot.

I was entering College the end of August 1971 and ended up taking 27 hours of economics, and an additional 60 hours of other business courses searching for the answer why. It has shaped me since.

Let me tell you this. Monetary systems only work as long as citizens have faith in their governments promise to pay. When all they do is to promise top pay with more promises to pay as the US has been trying to convince us for the last 30 plus years then we all begin to wake up and smell a rat.

Quite frankly, our country's glory days are nearly over. It is rare for any county to reign economically for more than 100 years. Our time is nearly up. We will soon fall back to the rest of the pack.

Baley · December 20, 2003 12:43AM

hedge your bets; if the carrot doesn't work, you always have the stick:

JoyofCollecting · December 20, 2003 12:46AM

BigE · December 20, 2003 2:05AM

But Oreville, if you had a US silver dime would it have worked? It seems like the general concensus here is that I should sell my junk silver and gold now as it would be almost useless. A better monetary disaster preparedness scheme would be to buy guns and ammo, tuna and seeds and build a greenhouse

------------------BigE

oreville · December 21, 2003 1:35PM

BigE: You might be right but isn't it better to take a balanced approach just in case silver and gold comes roaring back and the crisis is not so severe that guns are not needed.

Secondly what good is a greenhouse if it can't be defended with a gun meaning it can be gunned down. Better to have an underground fallout shelter equipped with generators and an underground greenhouse powered by the earth's core lava supply.

dcarr · December 21, 2003 3:03PM

<< A panic today would be far different than anything which has occured in the past. Food today
comes from factories and most people specialize to such a degree that they don't have the
skills to function in an economy which no longer provides the basic necessities. There are far too
many people to live off the land today in any case.

Any way you look at this there would be no value to precious metals and great upheaval.

Fortunately such a scenario is highly unlikely, and more importantly, becoming less likely with time. >>

I think the chances are actually becoming more likely.
We are not just a petroleum-based economy. We are a petroleum-based CIVILIZATION.

No Petroleum = No Civilization

It is absolutely critical that the Earth's human population stop growing. If we don't manage it ourselves, Mother Nature will do it for us - and when she gets involved, things can get very messy.

Of course, this is a difficult problem. Everyone is always striving for "economic growth". And what is "economic growth" ultimately ? I define it as the ability of the Earth to sustain more people. Our Economic growth engine is primarily a mechanism for rewarding those who find ways for the planet to support more people.

But to answer the original question -
Barring a nuclear detonation on Wall Street (literally), any economic "collapse" would play itself out over a span of months, not hours or days. The trigger for any such collapse, should one occur, would have to be due to a currency crisis where people loose complete faith in the currency. Americans are unaccostomed to this type of situation because it has never happened here. Many foreigners, on the other hand, have experienced one. And they are much more willing to accept gold or silver than Americans would. In fact, in many parts of the world, gold and silver are still the MOST preferred currency.

Should an economic meltdown occur, demand for precious metals would increase rapidly as all of the holders of US dollars across the globe would be trying to cash them in for something of permanent value.

In essence, that is what was happening during the Great Depression. Foreigners were cashing in their dollars for gold. US gold reservers dropped at an alarming rate until Roosevelt "confiscated" gold in 1933. The confiscation was necessary because the US governemnt owed gold that it didn't have. The price of gold actually went UP during the Great Depression.

If things got really bad, then a loaf of bread would be the most valuable thing around. I could see the world end up in sort of a "Soylent Green" worst-case scenario. But I don't believe it would ever come to anything like that.

The worst scenario that I think could actually unfold is a bout of "hyper-stagflation", where everyone earns less, and the price (in paper dollars) of day-to-day essential items goes through the roof. But precious metals would maintain their purchasing power in this situation. Basically, a lower standard of living across the board brought on by the depletion of cheap energy (petroleum).

dcarr · December 21, 2003 3:12PM

Ok, enough "gloom and doom". Here is another possible scenario.

The US dollar is "managed" by central banks in a prolonged (but controlled) slide. Eventually the global economy rebalances (the US trade deficit delines substantially, and jobs stop leaving the country).

Alternative energy sources (such as workable "cold fusion") emerge to take up the gap left by dwindlng petroleum supplies. Human population stabilizes at current levels.

In this scenario, precious metals also perform well, especially those used in alternative energy technologies (silver, platinum, and palladium).

Lets say the world monetary system came crashing down....................................

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