Most survivalist/prepper types will tell you that you should have a few hundred dollars in cash in our 72-hour kit. It makes sense: in most emergencies that would require use of such a kit, there is not going to be electricity to power your ATM and credit card readers. A lot of places already don’t take checks, and of those who do, very few are likely to take them when it isn’t possible to verify funds.
The more knowledgeable preppers will suggest you stock up on gold and silver. I used to believe this, but I have a different opinion now.
I don’t want to tread on any belief that gold and silver are important – to each his own – but the further I follow the logic, the less it makes sense. The idea is usually that when SHTF, government-issued money (our current coins and currency) are going to become worthless or lose tremendous value. Also, if you have to evacuate to another country (or our own is invaded or handed over to the UN), national money is not going to be transferrable, and the few exchange booths that stick around will be ripping off their customers because their services will be in great demand. The idea with gold and silver is that these precious metals are the world standards and all mankind wants gold and silver, regardless of national origin.
Sounds pretty good, right? Might as well grab a bag of diamonds while we’re at it …
I may simply be ignorant, but I don’t know how to test gold, silver, or diamonds. I know what they are supposed to look like, but to be completely honest, someone could hand me a nicely cut piece of glass and a brick of lead and I would probably not know the difference.
A lot of people who distrust governments and believe in elaborate conspiracies don’t think twice about the possibilities of impure or counterfeit gold and silver. They think a fancy US government imprint or coin guarantees the item “as described”. I have to wonder how many of these guys would readily accept a silver coin printed in Korean or a gold bar from a Kenyan native. Any gold or silver object can simply be a plated object made of a lesser metal, but it takes certain tests or skills to discern as such. I wouldn’t take any unknown, possibly counterfeit item in trade for my goods or services, and I suspect others wouldn’t either. Looking at past disasters, I can’t seem to recall any time when gas stations, grocers or hardware stores and gun shops accepted gold bars or pure silver coins in payment.
It’s not to say that the ultra SHTF TEOTWAWKI scenario might not include a need for gold and silver bricks … but here are a few things to consider:
- In the worst-case scenario, the US dollar has been devalued out of existence and some new or foreign government is now in control of our treasury. Where will you exchange your gold for the new currency? In many countries – even past US history – ownership was forbidden. The government would probably seize it and you’d be left with nothing.
- As mentioned above, most people don’t deal in gold and silver because verifying its purity and actual value is a little more difficult than our usual modes of commerce. Your ability to use it in trade would be restricted to those few who will accept it … and to find more who will accept it, you have to ask around and hope you won’t arouse suspicion.
- Though both have industrial uses, gold and silver are really only precious because we think they are. I have more use for water, ammunition, food and fuel than I do for heavy gold bricks and silver coins. I would imagine most people would feel the same in a disaster.
- We carry paper money and small coins because of the ease of transport and the ability to break down costs to a few cents. The most widely traded size of gold bar currently is the kilobar. One kilobar is 1000 grams, and 1 gram is approximately $32. If I were to buy 20 gallons of gas or a box of apples from someone, do I cut off a piece of my gold bar or just fork over the whole $32,000? You can buy specialty Japanese bars that are down to 0.3g, but still that’s about $9.60 at its lowest denomination.
- If we were using gold for trade because of its beauty, why not use existing paper money?
- The most primitive trade was done by simply bartering goods and services. Even a lot of our nation’s settlers worked this way, without a monetary system. Money makes trade easier, but it is not necessary for fully-functional trade to work.
When disaster strikes, hopefully we will be ready. For any supplies or services for which we are not, hopefully we will have useful skills or needed items with which we can trade. It’s a good idea to have some cash on hand for those small-to-medium disasters, but Gold bars are overkill. I personally believe gold only became a focus because of its history in the US, and that history is the stuff of conspiracies. As CMI Gold & Silver notes on their website:
“Some gold and silver dealers foster the circulation of many myths, misunderstandings, and outright lies about the purchase and sale of gold and silver. Generally, these misconceptions and falsehoods promote the notion that the government may again call in gold as it did in 1933 and that "reportable" transactions are preludes to confiscation. By cultivating such fears in investors, unscrupulous firms can sell high-priced (and often overpriced) coins with greater margins of profit.
Investors who believe these stories invariably pay too much or buy the wrong coins. After reading this Web page, no investor need be taken advantage of.”
1933, eh? Who was President back then? Oh yeah! Our old friend and inspiration for Barack Obama, FDR! He issued Executive Order 6102, which prevented ordinary citizens from owning gold or gold certificates.
Maybe there is something to this after all …