I’ve noticed a lot of emails from readers asking about investing in precious metals as a hedge against inflation. Since this is a subject that I’ve not covered before on TheSurvivalistBlog.net, I thought I would share my views on the topic for you in today’s post.
But before we get into the how to do it (or at least how I do it), let’s look at a few of the negative points of investing in metals and why I think you should invest mostly in other types of barter goods and survival gear.
Who Will Know…
For many people, the value of junk silver coins, for example, may not be conspicuous and it could be difficult to convince them that your coins are worth more than face value. Take your “junk silver” down to the nearest convenience store and try to get more than the face value at the checkout counter and you’ll see what I mean.
Money, gold, silver or whatever exchange medium you are using must be accepted before it is worth anything…
To get more than face value for your coins you’ll probably have to deal with a specialist, if not you had better be ready to explain what you have and why it is valuable to someone who has no idea of what you’re talking about. Good luck with that they will probably think you’re a confidence man or something.
When the stores have been empty for weeks and Joe six-pack is down to his last can of green beans, don’t expect him to trade that can to you for your “junk silver” coin.
What Will It Be Really Be Worth…
Someone without food, medicine, shelter or a means of protection, will want those life-sustaining basics much more than they will any form of currency. After all, they can’t eat gold or silver, they can’t plant it, they can’t use it to provide energy, they can’t wear it. Basic needs must be taken care of first – for that reason, I look for the price of collectible metals to plummet after a far-reaching end of the world type event at least until people start to rebuild.
It comes down to the type of disaster and how bad things are after the fact that will decide if people see coins as valuable or not. But, people will always need to eat, drink, stay warm and be protected.
Think about it – the nation has been devastated by a widespread epidemic disease, millions are dead the economy, power grid and transportation have collapsed. Which would you rather have a .22 rifle and box of ammo or a hand full of gold coins?
Who would trade you their .22 rifle and ammo for your pieces of metals? I wouldn’t and I doubt your neighbors would either…
At best hoarding such metals would provide limited protection during an economic crisis with no guarantee of being able to trade for what you need when you need it. It’s best to already have what you need to be put away so you don’t have to go looking to exchange those pieces of metal for life-sustaining basics.
Gold and Silver Confiscation…
Who can say for sure that it will not happen again? It probably will…
I’ve read many comments on this and other survival blogs pondering the possibility of food confiscation and redistribution after a disaster and while this is a real possibility, I think we would be more likely to see the confiscation of metals such as gold and silver especially if the disaster is economic.
Laws such as the “Trading with the Enemy Act,” and the 1977 “International Emergency Economic Powers Act” have opened the door for future confiscation. Remember; you can legally have only what the government says you can have and they can make you into an instant criminal with the stroke of a pen.
Don’t think because your assets are held in precious metals that your wealth is safe – it isn’t.
Should You Do It?
From my statements above you may think I’m against hoarding precious metals – I’m not. Just don’t go crazy collecting gold and silver coins, get your basic survival needs first.
Remember, you can’t eat a silver coin or gold, it can’t keep you warm, it can’t protect you from attack and you can’t live in it. On a personal survivability standpoint, it isn’t all that important…
What I Do and You Should Too
After you have your other survival needs taken care of you might want to invest some of your time collecting and hiding coinage – here is what I do…
From 1837 to 1964, the United States dimes were made of 90% silver and 10% copper—just like the Morgan Silver Dollar. I double-check all my pocket change for these – since pre-1964 dimes have become numismatic collectibles, I don’t find many this way but when I do I quickly put them away.
Similar to dimes, United States quarter-dollar pieces were also made of 90% silver and 10% copper from 1932 to 1964. I treat these in the same way as pre-1964 dimes. These quarter-dollar pieces are exactly 2.5 times as heavy as silver dimes and obviously have more value.
Aside from checking your pocket change, you can buy junk silver coins at a markup, but I would rather get them for free. Creekmore, how in the Sam Hill do you get them for free you ask – with a metal detector, of course. You would be amazed at what you can find with these if you take the time and know where to look.
I like to look around old home places (with permission) schools, and churches. Do your research and keep in mind that you’ll have to hunt the older places to find quality coins – look for areas that were in use before 1964 and you will have a better chance at finding the coins that you are looking for.
This is how, I’ve found the bulk of my junk silver coins and an approach worth considering for anyone interested in putting back junk silver coins against the day of need. A good book to help you get started if you’re interested in doing this is Metal Detecting for the Beginner.
I also save all of my nickels – the composition of a nickel has been unchanged since the end of World War II in that it is still a 5-gram coin made of 75% copper and 25% nickel, with the metal value being worth more than the face value of the coin. Check http://www.coinflation.com/ for the current value.
What Do You Think?
Should collecting metals be a top priority? What are you doing? Let use know in the comments below…