The Truth About Precious Metals for Survivalists

by Dan Novak

There are a few common misconceptions associated with precious metals and how they may not be helpful to a preparedness plan for either a SHTF scenario or potential economic collapse.

1. If I can’t eat it, drink it, or use it to defend myself, I don’t need it.

2. I’ll just get stuck buying some worthless coins and never get anything out of them.

Although these are some generally popular perspectives, they are completely misguided and incorrect. So how can precious metals be useful for survivalists when the economy collapses?

The truth is, precious metals are essential for survivalists and will help you stay prepared for all sorts of upcoming turmoil. Below, you’ll find rebuttals to the common misconceptions about gold and silver and how they can literally save your life when the SHTF…

1. “If I can’t eat it, drink it, or use it to defend myself, I don’t need it.”

Precious metals have been used as a stable store of value and a medium of exchange for thousands of years. Although you cannot actually eat, drink or use it to defend yourself you can use it in barter or trade to get any potential needed items.

For example, if you are trying to trade with a neighbor for ammunition and you only have water, food, ammunition and first aid, chances are, he/she has those exact items also. You need to pay with something that can be used as a medium of exchange so that your neighbor can buy whatever he/she may need from someone else.

You won’t always know what people may need in a barter or trade situation. That’s why having a form of currency is essential!

2. “I’ll just get stuck buying some worthless coins and never get anything out of them.”

I say this to prospective precious metals buyers, it seems like, a thousand times a day:

“Stay away from collectible coins! Don’t do it!”

Collectible coins, or “numismatic coins,” are like art. Their value is largely subjective. Some people might pay millions of dollars for the Mona Lisa. Personally, I wouldn’t pay 20 bucks for it!

Don’t put yourself in a hard spot to try to get a buyer who will pay as much as you did to get some mint special coin. The liquidity just isn’t there when compared to gold and silver coins, bars, and rounds that are traded at their melt value.

So buy BULLION!

Bullion is the term that is used when trying to buy precious metals closest to the spot (sometimes called stock market) price. Ask your buyer, if they don’t have it listed, how much over spot you are paying per ounce. The price of gold and silver is fully transparent and can be determined around the clock around the world. Getting the lowest price per ounce is generally the smartest choice.

After the 2008 real-estate fiasco, the economy was trash! In 2011, however, silver jumped up to $40 an ounce even though the rest of the country and economy were still trying to pull themselves out of the grave. Precious metals are not only a good option for a survivalist perspective but they also help to hedge against inflation and perform well in periods of economic turmoil.

What You Need to Know for a Survivalist/SHTF Scenario

In a barter/trade situation it’s important to remember that having different sizes and metals is always smart. Having Pre-65 junk silver is a great option, it is in smaller fractional sizes, and, because it is 90% silver (containing 10% copper), it will wear well being handled more frequently.

Silver rounds, especially in the smaller fractional sizes, is also an attractive option. And consider getting gold for some larger cost barter situations too. Fractional gold coins are small but carry a larger amount of value compared to silver.

With our government racking up a national debt of over 19 TRILLION dollars and climbing, it’s time to start preparing for our currency to be obsolete in SHTF scenarios…
Remember: “You won’t always know what people may need in a barter or trade situation. That’s why having a form of currency is essential!”

Dan Novak is an avid survivalist and precious metals specialist at Money Metals Exchange. Staying educated on economic turmoil and maintaining a survivalist mentality are incredibly important in the world we live in today.

Comments

  1. Robert S says:

    Priority order – (1) “beans” (food and water), (2) “bullets” – multiple means and methods to defend your (1), (3) “band aids” – equipment and training to handle medical emergencies, from diseases to gunshots (because of (2)), then (4) “bullion” – means to handle trade and and investment with tangible valued goods.

    • gthomas says:

      pedantic ramblings of one whom trips over dollars looking for nickels. How many folks on this board do you think will agree with your sentiments ensuring your standing on a defeatist blog? Some go with the flow. I posted on my twitter acct to buy PM’s at YE ’15 as silver was below production cost and a chart read mandated such a move. How much food, weapons and ammo can I purchase now? You’ve no idea. It’s made a 50% return.

      All I’m saying is those here whom are mired in defeatist thought will remain defeated. Please help yourselves with education and don’t succumb to traps, however or by whomever, they are espoused. Some here make fun of the “elite”, “globalists”, “Soros” et al; I, however go with the flow for my loved one’s sake. That requires real world education. You have free will but remain objective an open to the fact that we pions have no control so prepping has been a visceral response vs. what’s really in front of your face. But, bacon…

  2. PatrickM says:

    I agree that PM’s should only be secured in larger amounts after a base foundation of preps are established.

    Any round of low prices should also be taken advantage of, but depending on prep level. A oz. of silver a month won’t break the bank for most (four visits to starbucks?). On the other hand, an oz. of silver cost would provide alot of beans and rice, or salt. Prioritize.

  3. Thomas The Tinker says:

    I would place a ‘sucker bet’ that every one of us who haunts this site… Every ….. One .. of us waste the cost of $2.5o face value silver each and every month. I know I have.. and do. I want that “Happy Meal”. I want that P-Mag to throw on the pile. I want that bag of “Rose” rice at Cost-Co that I don’t have any bloody place to put.

    Challenge to the Pack!!!
    From the time you read this and this time next week …. lets say the Next Sunday of MD’s WDYDTP, we drop our loose change and the impulse money in a coffee cup and see what each of us comes away with.

    You can post your total then… and how much silver you bought the following week.

    I’ve got 11 cents as of this a.m. and I haven’t left the house yet. I’m posting this comment and going to “CoinFlation.com” and see what the spot is at the moment and the cost of a dime, a quarter, a half and a cartwheel.

    • gthomas says:

      Never bought a happy meal as I never eat out. I’ve not had a mortgage in 20 years but I still prep. Some critique my “style” but no one preps to my degree. I’m quite wealthy by most standards but I don’t even have a “smart phone.”and blah, blah, blah. Do you? I paid 35,00 tax revenue in 2002 taking advantage of the RE fiasco after my investments. One should not place a fool’s bet on subjective reasoning IMO

      • gthomas says:

        $35,000 tax I paid in 2002. Auto correct, or something.

        • Thomas The Tinker says:

          ????? gthomas …. try De-cafe. Then read for content and not personal insult.

          • gthomas says:

            No need to reply. I am leaving. No value. I get a laugh about people thinking that what they had to do this week to prep was replacing some worn batteries or getting new tires, a common occurrence by…guess who, everyone! This site has been helpful but has become a rant and raves, FB blog-type “like” site and is not useful for me; and apparently, I’m not feeling my usefullness because the ladies like CB and BC don’t want free challenge of thought and gets all bitchy. Good luck and anyone who reads whom feels a need to look good in front of their peers and proffer a response..feel free in knowing you won’t get destroyed as I won’t see it. Other than that, good luck y’all.

          • I know…I can’t stand people who just have too…must…point out that someone forgot a decimal in thier figure. Annoying.

    • PatrickM says:

      Thomas, I’ve kept a “change cup” in my dresser drawer for years. This last time netted almost 36 bucks when counted out (it was overflowing). Usually around 25 bucks when full. The time it takes to fill varies from two to four times a year.

  4. JP in MT says:

    If I only new what form, how long, what location(s), and how bad things are going to get, prepping would be so easy. I wouldn’t buy things I’m not going to need, keep them too long, or run out. But since I don’t I try to cover all my bases.

    On a personal note, when I started buying PM’s, it was for the long term. Then we had a mini-crisis, cash was needed now! I sold most of my PM’s to cover that problem. Now, admittedly, my timing could not have been better because I sold them when the market was way up, it still is lower than when I sold. So anything I re-buy now, is less than when I sold. But, as part of an overall plan, I still believe in them and acquire them when and how I can.

    • Bushman says:

      The point of having PMs is the ‘storage’ of liquid assets… ‘Hard Assets’ like land, firearms and such… isn’t it? Selling off PMs on a market high… is … something else.

  5. Sweetpea says:

    Good article. Let me tell you a couple of PM stories.
    25-30 years ago I bought a small fortune in PM’s. I had more silver than I could physically pick up and so many gold rounds I felt like Scrooge McDuck when I got them all out on the table. But I had to hold these for years and years before I could make a profit with them. You don’t control the market and you are the slave to the market. I didn’t “need” that money is was more like my retirement fund but if it had been money I needed to live I would have had to cash it in at a loss.

    In 1975 a friend of mine sold me 20 silver dollars for $95. I felt great about the deal, I love the old American silver and the price wasn’t bad. Too bad though that I missed his real message. He was a buyer/collector of PM’s. He had silver and gold bullion and silver and gold coins. But he had decided to get out of the “junk” and concentrate on rare coins. He had a beautiful collection of PM’s, made your hands itch and your mouth water just to look at them all piled up on his table. But he sold it all off (Gold was about $48/ounce and silver was a couple bucks or so) and bought only American rare MS-64 quality coins. He turned his $20,000 or so (1975) into about 20 total MS-64 collector quality American gold coins. His collection’s worth in 1976 was about $50,000 or so (he did indeed put cash into it as well as selling his bullion to acquire it all) To make a long story short his 20 coins were sold about 2004/5 for $2 million. So the moral or the story is don’t disregard collector quality coins but you have to know what you are doing.

    • gthomas says:

      that was awesome! Thanks for sharing.

      • poorman says:

        thought you were leaving?

        • Chuck Findlay says:

          (Thought you were leaving?)

          Nope he / she will stay to see what we say about him or her.

          The arrogance in Gthomas’s posts are easy to see as is the need to tell us how much smarter he / she is then all of us stupid people. The need to check back is too powerful for he / she to avoid.

          Who cares what gthomas thinks?

          But there is a survival lesson there in that a given part of the population is like this (Arrogant and stupid) and it’s good to be aware of the fact we will have to deal with them at some point.

          • IdahoBob says:

            IMHO replying snarkily to snark is counter productive. If you disagree with someone and can present your argument reasonably than do it. If you only want to get your two cents worth of snark in (no matter that you think the original snark was wrong or disrespectful) than you are really no better.

            Again, IMHO, often when someone writes something totally contrary to what the pack likes/thinks it is not simply snark but rather it is a legitimate point of view worthy of consideration. Even then, after consideration, you can disregard it but at least consider it.

            Also not everyone comes across all sweet and honey and it is the nature of written communication that you cannot see mirth or sarcasm easily. Try to read between the lines and to get past what appears to be snark. It could simply be their style.

    • And when your doing it…
      The whole point from the beginning about PM’s was for the prepper community. An MS64 Gold eagle during a barter session in a post apocalyptic setting isn’t going to be any more valuable than a scratched up tarnished eagle. Matter fact, the person your trying to barter with might even devalue your treasure because he has to remove it from the holder….such a pain.

  6. riverrider says:

    one other thing they are good for, bribes. the border guard, jailer, police, public officials etc. they won’t be making much, but have considerable power over everyday life even post shtf. just look overseas for examples. or Venezuela. hard to sneak a guard a chicken un-noticed , but a couple of eagles might get you through the door.

    • gthomas says:

      PMs are simply insurance against the fed’s fiasco. I do not view them as a tradable item at all. If one has a sufficient amount of wealth, then one needs insurance against that wealth as a hedge. All the “preppers” buy the cheap gold and then when the SHTF the market may be saturated with folks trying to buy rice with the cheap metal…driving the price to worthless even. Think it through. Silver is still a commodity, gold is money IMO although I own both.

      • Thomas The Tinker says:

        Better… We own both as well… as a ‘store’ .. for some .. of our liquid wealth. We want to be able to participate in any new economy not just buy our rice and beans.

      • Silver will never be worthless.

  7. I believe in PM, but basics first. Many have a small amount but if you don’t have water you have nothing. Said from the perspective of a desert dweller. What would you run out of first? I am working on bandaids… aka herbal medicine from local plants. Not tropical or market economy, local. Water and food okay.
    Okay for self-defense, not for going to war. I have a ways to go but work on it regularly. Skills also barter. Hand tools are awesome. What I noticed about having a forest fire threaten my home was that I would take tools to recreate everything else… seeds… and PM. I have a pickup and would fill it up like a covered wagon. Skills and the tools to make the future happen.
    Physical metal not stocks if you are buying.
    Balance is good, but

    • Anonamo Also says:

      Rebecca, If I were in a place that had regular “events” .. I think I would try to establish caches of tools, seed, supplies to protect from that event… an underground/ earth-sheltered home would be great as well.. From following your posts know you are heading that way…

    • Chuck Findlay says:

      Rebecca a storm shelter would be good “Think Wizard Of Oz”

      And a Wells Cargo trailer could be pre-loaded (If you have barn or garage space to control theft) with what you think you would need.

      • Chuck
        One of my current projects is moving a pile of crusher fines out of the living room of my cabin-in dreaming. I have dug out the hill already and it will be small and underground, about 400 square feet. I have 2 outbuildings. I get up every morning and build pathways with that gravel as well as bring rocks down from uphill to edge them and make raised beds. One raised bed 8. It allows me to move all that gravel once. It was so hot today I didn’t get prickly pear transplanted to under my windows, but this week for sure. Miserable heat!
        I am saving up for a trailer to haul out with my Tacoma. I am watching for one.
        I am not very fast. I am persistent. It all has improved since last year!
        I started digging the perimeter foundation for my underground shelter, too.

  8. Anonamo Also
    Slowly but yes I am headed that way. It made me want more tools!

  9. Chuck Findlay says:

    As far as beans, bullets and band-aids before you buy any PM’s I don’t buy into that.

    Not saying to go hog wild with silver if you don’t have other basics covered. But all of us can afford a few ounces each month along with other preps. I did this for years to slowly build supplies of silver. And while it was a slow process, every new coin felt good to have.

    I also did auto repair work that I asked to be paid in silver from someone that bought it for himself. Do you have a skill you could barter for silver?

    A few days ago I bought some silver at a garage sale, 2 one ounce rounds and 2 1963 Franklin 1/2 dollars. Got them for $20.00, that’s about $50.00 in silver for $20.00, not a bad deal…

    • Chuck
      I have a small amount of silver, but don’t have the basics covered yet and paying extra on my tiny mortgage. I am in favor of all of the above.
      My skill is food and herb production, no value to most on here, but rare in my hood. A valuable skill set overall Considering I do a lot around the house.
      My son is heavier in PM and brass but is no gardener. Team.

      • Rebecca:

        Your son’s “contribution” is definately heavier, per unit. Hope things are co-located.

        • JP
          His contribution is definitely heavier! Even so, he and my grandson will come help me relocate 1100 miles closer to them. Even his food storage, enough for 4, is much greater than mine for one. I have all the canning supplies, piles of jars, dehydrator, oil press, grinders, pasta maker, tortilla maker, and so on. All the seeds. We compare and do not duplicate much. I knit, sew, crochet, and make quilts. I am the one experimenting with growing textile fibers and processing them. I will build a greenhouse and Navajo loom. He and his BIL are in charge of technology and most trade. I have been bartering food and skills for years.
          We are not as far as we need to be but we all have the proper mindset. My son is the head of our extended family. I do have a 12 and 38, minimum stuff. A little pm. I am a biologist, plant science concentration… now studying herbals and the human body.
          So I do plants from front to finish and coordinate everything with my team leader aka my beloved son.
          If I think of more stuff I let him know. He coordinates with his BIL who is head of his family. We are 12 total.
          It will be better after I move the BOL closer to the family and get my garden started. I will plan to feed 30.

          • Rebecca:

            Sounds like you guys have a well thought out plan.

            There are days I wish I had family involved; just not to be.

            • JP in MT
              I hear ya, and being so far away has been an agony of loneliness and concern about what happens in the crash.
              Since my son is team leader I don’t have to try to herd cats. I hate herding cats. I am glad all seem to think my skills are crucial, I always want to be useful. I would probably work just as well with his BIL, but my son has no trouble leading his mom by the nose.

            • JP
              Your family is not supportive and working together? A heartache. I will add you to my prayer list. We may be almost neighbors when I move north. Let me know if things change, I will keep praying until they do. You would laugh at my son and I kneeling on each side of the coffee table during his teen years, praying through that scary time. It made changes in both of us.

  10. buying gold and silver is good but be careful! We’ve probably all heard by now of counterfeit silver and gold rounds and bars. It is getting pretty common. It was always safe to get the old actual silver coins. Well, there are multiple reports now of bogus silver dollar coins now too. It has even fooled dealers. Some dealers have their ways of telling authenticity, but I don’t.

  11. A sales pitch from a PM seller? Don’t buy it.

    • Thomas The Tinker says:

      GregJ. To say the author has ‘chips in the game’ is a fact. Thing is…. PMs in fact have a place in nearly everyone’s ‘stash’. Buy local. Buy tax free. Sell… and understand that there IS a limit as to how much can be sold at one time with out being passed along to the Fedaralis…. I believe it is 200 ozs. per transaction.

  12. swabbie Robbie says:

    Premise:

    if you are trying to trade with a neighbor for ammunition and you only have water, food, ammunition and first aid, chances are, he/she has those exact items also. You need to pay with something that can be used as a medium of exchange so that your neighbor can buy whatever he/she may need from someone else.

    You are equally likely to have ammunition for your guns and similar things as your neighbors. In that situation there may be little to trade for gold anywhere in your area. Your labor and skills may be the the best barter with your neighbors. The best use for gold, as has been the case for the last several hundred years, is in a bug out where you need portable wealth to reestablish yourself.

  13. Chuck Findlay says:

    PM’s are important to have for several reasons.

    First: there is no way you can stock everything you will ever need; you (meaning all of us) are just not smart enough to know what we may need in the future. PM’s can give you buying power at these times.

    Second: Money (don’t for a second think that PM’s aren’t money) will always be a part of human interaction. Every society throughout history has had exchange and always will.

    Third: Given that we all hate it’s invasive nature and have dreams that it would just go away. But the truth is that it (government) will always be there and it will forever tax us. We need a medium to pay property taxes, if we don’t pay them, men with guns will come and throw you off your property if you don’t pay ransom (taxes) to the government. It happened a LOT during the 1930’s. A pile of silver or a few gold coins put up could keep you in your home when the dollars buying power has been devalued.

    Forth: PM’s are a way to save the work you do today for use (as in buying things in the future) tomorrow when you may not be able to work (old age, injury, disease, no work is to be found, or any of 50 other reasons.) I just experienced a problem in that my mom has dementia and needs constant attention; my dad went into the hospital for 4-days through the 4th of July weekend for a UTI infection. My brothers don’t feel their life should be interrupted and I had to baby-sit my mom. Had it been a normal work week I would have had to not work and had no income. What if it went on for 3-weeks or even months?

    Forced down time of no work is a normal part of life for all of us at some point. And while we save US dollars for these times, if it happens post-SHTF and the dollar is worthless and we must chase every work opportunity we find to survive what will you do if you can’t work for some reason? Silver or gold can help survive these times.

    I would say that it’s foolish to not have some PM’s as it makes you poorly prepared for economic downturns that we all know are cretin to come.

    And on the off chance they don’t come PM’s are still after all PM’s and have always been and always will be PM’s and you can turn them in for the script of the day when you need to.

    PS: PM’s stand for Precious Metals, precious means they are precious, relatively speaking, rare and have value, and always will have value.

  14. Crazy Joe in South Jersey says:

    Greetings All !

    I have been collecting coins since about age 8 . Age 8 was anything including foreign junk but it was from another country so cool to have and hold .

    A wise and serious coin collector uncle also collected silver & gold bullion . I was taught about both fun and making money on an investment . It was never an overnight thing . Long term always . Never lose the fun aspect .

    I have both numismatic collectable silver and junk silver . I did well with silver and gold bullion in 1980 and again 3 years ago with both silver and gold .

    The best part is not paying taxes if you sell under a certain dollar amount . If I need a quick 1000 dollars I can sell a dime or two . Then there are some quarters from pre 1840 in case I want a boat . If SHTF then I still have value in the collectable coins . An important lesson from uncle was that greed , avarice and jealousy play a part in a person’s wants versus needs . These things always exist .

    I made a modest profit on gold . It takes a lot to make a lot as is with anything in life . My silver profit was large . Love buying silver at 2.83 an ounce and selling at 50. an ounce .

    GOLD OVER THE PAST 180 YEARS ……
    http://www.nma.org/pdf/gold/his_gold_prices.pdf

  15. Clark Nance says:

    I enjoyed the article and the lively debate that followed. My main reason for avoiding precious metals is twofold: First, if you buy them now, you are already buying them at an inflated price. Second, any transaction with currency (i.e., anything without inherent life sustaining value) presupposes an ordered society of some type. That may be taking too much for granted. In my opinion, the best currency is “ballistic currency.” If things every get as bad as some folks predict, I think .22 cartridges may become the new coin of the realm.

    • Thomas The Tinker says:

      Sir Clark Nance: Your last line is a truism.. a given in IMHO. Your third line is a truism.. if one equates ‘Market Price’ with value. Line five is the tie in… We should never take either PM for granted.. Silver, Gold, Brass, Copper nor Lead.

  16. I think precious metals for the majority of them are very attractive. Me too. Lol

  17. never agreed with storing PM’s for barter,
    why not just get and store the stuff you’ll need for post SHTF NOW? that way you wont have to barter, probably at a time when its not safe anyway, don’t put yourself in harms way-you don’t know the intentions of the person your trading with, they might wish to do you harm and steal everything you have.

  18. I think this post raised a point, if there is no common unit for unit representing for value, it will bring us back to thousand years when people exchanged goods for goods. Using a common unit is a breakthrough in economy, making it more easier to trade goods and increase the productivity. I think coin or money paper, whatever kinds, there still need common unit of value.

  19. Bartering is good and happens every day. Using currency is known to all and will likely be well accepted by those who have plenty due to diligence. I produce tons of food… what would I trade for? Some heavy work or silver. But not trading food if I don’t have enough for my family. Best to have some PM unless you are on the edge of starvation already.

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