What If....?

[etm42]

I am an utter newbie to precious metals, so please pardon what I guess is a naive question:

I can understand the use of PMs to store value and then convert it to cash when needed.  However, many sites and videos dealing with the subject also claim that, if some widespread emergency were to occur, you'll be able to get through the crisis more easily if you have PMs on hand than if you don't.  But that would surely depend on whether anybody accepts PMs as payment.  Maybe the most useful currency might be cigarettes or illegal drugs, in which case you and your PMs are in the same boat as everyone else.  Basically, I am wondering why the Armageddon argument is even made, or should be made.  Is there any reason to expect that, after some huge disaster that involves the destruction of the internet, PMs would sooner or later float to the top as the preferred currency?

Thanks!

[Nick]

The idea is that PMs have throughout history been used as currency across the world.

Immediately following the collapse of civilisation PMs are going to be of very little, if any, use. You'd want supplies of food, water, hunting gear etc etc to survive that period.

Time would go on and civilisation would rebuild. 

At that point trade would most likely resort to some sort of currency and judging by history PMs will be the preferred worldwide currency. 

As you stacked a lot of PMs before the apocalypse you are now an incredibly wealthy individual.

I do believe that is the Armageddon angle that you talk of.

It's a nice story. Here's what will happen to me with my luck:

Civilization collapses

I somehow manage to survive the period of rebuilding; I'm finally incredibly wealthy!

The new government or king or tribal leader wants/needs PMs to fund armies etc

The new government / king forcibly removes all my PMs 

I'm back to square one

[blackadder]

15 minutes ago, Nick said:

As you stacked a lot of PMs before the apocalypse you are now an incredibly wealthy individual.

if you're still alive and haven't just been murdered for your horde of gold and food

[tbone]

For a SHTF scenario (not a situation I think will happen), you'd want something of value that is easily recognizable.  True, you could use whiskey or cigarettes or whatever, but how easily is that to store, how long will it last in storage, who would want it (eg, my neighbor who smokes might want the cigarettes, but my other neighbors won't, some drink, some don't) etc...  Basically, it comes down to what defines good money.  These are:

Durability, portability, acceptability, limited supply, divisibility and uniformity.  It should also have intrinsic value, so it can hold this value over time.

Here's a good youtube clip about barter vs money.

For this scenario you describe, 90% silver, ASE and AGE fractionals would be best in the US.

 

[etm42]

@tbone - Thanks for the youtube link!

[Kman]

Personally a SHTF scenario isn't my reason for stacking/collecting

[kimchi]

I think should that happen then initially daily necessities - food and water - are the absolute key. Stock upon cheap long-life food and work out how you are going to get clean water to drink (lifestraws are cheapish for what they are for a short term emergency assuming no electricity, longer-term there are many other options that 99.9% of the UK have probably never even considered).

'Desirables' such as tobacco would be hard fought over too, but demand would drop off over time as they ran out, and would become a 'treat' indeed, but it depends how bad things are - I think even serious smokers would have to go cold turkey if the choice was that or food. Hard drugs? Addicts would be in a very bad place, I don't think they'd last long...

PMs are a 'cover the bases' for me if the SHTF. In a post-apolalyptic world they may eventually settle as the medium of non-direct exchange, but it'd take some time (at least six months) imo. They may go stratospheric after some time and enable you to live like a lord or lady (who knows?!!), but that's no good if you die of thirst or hunger first!

If you think SHTF could happen stock food and water purification means that don't rely on electricity. If any family members rely on meds stack those too.

 

[KDave]

Bitcoin is the new gold so you will be trading those for food and cigarettes in post apocalyptic zombie land. Might want to keep some silver for the werewolves though 

Sorry. On a serious note I agree with the posts about having enough to be self reliant in the worst event, sound advice above. It's happened before in history, war, plague, famine, all are possible and indeed inevitable again. The government is made up of people who have the same needs as you and will put themselves first if they are able. Think shorter term, service outages are very common and infrastructure based supply can be down for days even in a fully functioning society and economy. You could be on your tod for a prolonged period in such events if they are not managed properly. Supply chains can breakdown or be disrupted, food, medicine, electricity, water, gas. It could be for any length of time. Last week half of the houses here lost water for 24 hours and the effect on neighbours was very interesting to say the least. People can't cope without mains water for 24 hours what does that tell you. 

This winter the UK is buying gas from the big bad boogie man Russia, which is under sanction by the way, for us to meet shortfalls. An example of how fragile the whole thing is. Have back ups in advance. Heating and light, water and food. We insure everything else in our lives that is all this is, calling it something else doesn't change the fact. 

But specifically for pms, these are assets for financial collapse rather than societal. If the monetary system is disrupted for a meaningful period, if the system fails as nearly happened in 08; the paper claims to wealth will be measured against what is left - real stuff. Gold offers insurance, or a chance to profit from the change depending on your holdings and perspective. 

Of course perhaps my joke about bitcoin is wrong and people will resort to trading ledger entries? I doubt it but who knows, perhaps werewolves are real too. 

[MIP]

.But that would surely depend on whether anybody accepts PMs as payment. 

It has been the case in the last 6000 years, I would sleep pretty well knowing that.

[etm42]

20 hours ago, Kman said:

Personally a SHTF scenario isn't my reason for stacking/collecting

@Kman - Would you share your reasons for collecting?  I'd be very interested to know.  Thanks!

[kimchi]

43 minutes ago, etm42 said:

@Kman - Would you share your reasons for collecting?  I'd be very interested to know.  Thanks!

What other reasons can you think of? List them. Then put them in order for yourself. SHTF was top of my list before actually investing and then researching (oops did that the wrong way around and it cost me - live and learn!). Now it's pretty much the bottom of my 'practical' reasons to buy PMs. There are a few reasons below it (3 give or take), but they're purely materialistic/indulgent etc (not necessarily a bad thing, though they easily can be imho - I realise with hindsight where I've strayed, and that learning experience is all part of it :)).

That said if SHTF is presently pressing on your mind, and you're also taking measures for food and water etc at the price PMs are at now, I would personally sink everything I could into them while still hedging 'enough' in fiat.

[Kman]

1 hour ago, etm42 said:

@Kman - Would you share your reasons for collecting?  I'd be very interested to know.  Thanks!

I like having some of my savings outside the bank and fully under my control

I also like to try and get numismatic coins I think will gain in value, which will serve better than cash sat in the bank

 

[JunkBond]

2 minutes ago, Kman said:

I like having some of my savings outside the bank and fully under my control

 

 

This, above all else this.

[kimchi]

1 hour ago, JunkBond said:

This, above all else this.

But, my bank manager is so nice...he always shakes my hand quite warmly. He also offered me a cup of tea or coffee once...

[Xander]

When the SHTF just keep calm and let the bank handle it.

[kimchi]

6 minutes ago, Xander said:

When the SHTF just keep calm and let the bank handle it.

We can't go wrong with Terry May in charge

[KDave]

Remember when it all goes tits up, gold and silver will crash along with everything else. No one will be buying anything and everyone will be selling to cover margin on those paper claims. Cash may be the best thing to hold, if you are buying when everyone else is selling you could get a lot of value, IF you can find physical to buy. Lots of paper will be on sale, including the billions of tons of paper metal. Not sure about physical. 

[Xander]

23 minutes ago, kimchi said:

We can't go wrong with Terry May in charge

We are in a safe pair/s  of hands...could be a wedding on the horizon?

[kimchi]

2 hours ago, Xander said:

We are in a safe pair/s  of hands...could be a wedding on the horizon?

I can't tell which is the less convincing waxwork

[Xander]

Just now, kimchi said:

I can't tell which is the less convincing waxwork

You sussed it already...I could swear they were moving.  Love is in the air.

[kimchi]

18 minutes ago, Xander said:

You sussed it already...I could swear they were moving.  Love is in the air.

Look at the hands ffs! Good old 'three fingers May (melting at the tips)' and goodness only knows what is happening with that other chap's.

The Thunderbirds were more realistic!

[JunkBond]

Don't even get me started on that political farce.

@kimchi your bank manager is probably as clueless as 99% of the population, not like the enlightened ones on TSF.

[sovereignsteve]

14 hours ago, KDave said:

Remember when it all goes tits up, gold and silver will crash along with everything else. No one will be buying anything and everyone will be selling to cover margin on those paper claims. Cash may be the best thing to hold, if you are buying when everyone else is selling you could get a lot of value, IF you can find physical to buy. Lots of paper will be on sale, including the billions of tons of paper metal. Not sure about physical. 

Not sure if all that makes sense, but my brain hurts at the mo and haven't got the energy to work it all out!

[tbone]

On 12/15/2017 at 14:40, kimchi said:

But, my bank manager is so nice...he always shakes my hand quite warmly. He also offered me a cup of tea or coffee once...

Wow!  You must be a high roller, my bank has 2 tellers that can't do much of anything...I usually get shuffled over to the automated teller

[tbone]

On 12/15/2017 at 15:32, KDave said:

Remember when it all goes tits up, gold and silver will crash along with everything else. No one will be buying anything and everyone will be selling to cover margin on those paper claims. Cash may be the best thing to hold, if you are buying when everyone else is selling you could get a lot of value, IF you can find physical to buy. Lots of paper will be on sale, including the billions of tons of paper metal. Not sure about physical. 

Initially I agree.  But soon the powers that be will be swooping in with promises to drop money from helicopters.  After that, demand for real money should go straight up.