Currency/money after TSHTF

[pooky2483]

I'm not sure where this post should go so, Admin, please feel free to move this thread.

I have been watching some Mike Maloney video's and got thinking about buying bitcoin (I've yet to find where I can actually 'buy' bitcoin).

I've looked at a few sites where I can buy silver coins and I came up with a question...

Why are there different prices for the same exact amount of silver, 1oz (1 TROY oz/31.1g).
That made me ask another question, if/when TSHTF and it really goes tits-up - No power.
How is the internet going to stay 'on' and who/what finally determines the price of gold/silver?

With no power, that would mean no internet and in turn, NO BITCOIN (yes, I know it's all stored in your hard drive (wallet), but, how are you going to spend any of it when the power NEVER comes back on. Regarding gold/silver, as I mentioned earlier, 1oz of a coin in one design costs a different price to one with another design on it. Who or what is going to say exactly how much 1oz will cost, which could be more or less than what you paid for yours, straight away, you're going to have more or less of a total value.

And, another question regarding gold/silver - what about exchange rates and control over the value. Will there be a central control over rates and who/what determines the value?

I'm not afraid to go out on a limb and say that the only 'currency' which will work is our sweat equity/skills as there would be no set control/restraint on the 'value' of gold/silver.

 

[DrHenley]

It will be worth whatever someone is willing to pay (or barter) for it. As will everything else.

That's actually how the price is determined now, it's just centralized.

 

[Brent S]

I’ve heard a lot say that 22lr ammo will be the new currency, and can’t disagree with that completely. My advice is to diversify any investments you have. I believe having some gold, silver, cash, hand tools, ammo, etc are all good ideas. No one has a crystal ball and can predict exactly what will or could happen. Covering as many bases as you can makes sense to me.

 

[DrHenley]

I’ve heard a lot say that 22lr ammo will be the new currency

Maybe wishful thinking by the people that scarfed up tens of thousands of rounds at twice or three times the current market price?

 

[Brent S]

Maybe wishful thinking by the people that scarfed up tens of thousands of rounds at twice or three times the current market price?

Lol, yeah for a while there it didn’t matter how much it was, if you could find it you were lucky. Glad to see it again at a normal price and availability. Got me thinking I could use some more.....

 

[Mountain trapper]

Lol, yeah for a while there it didn’t matter how much it was, if you could find it you were lucky. Glad to see it again at a normal price and availability. Got me thinking I could use some more.....

That's right. During the ammo "shortage" I had to even buy subsonic and standard velocity .22 ammo. There wasn't any high velocity ammo anywhere. Over the last couple of years I've been selling off my stock of subsonic and standard velocity ammo.

 

[tmttactical]

To me, consumable items, ammo, food, clothes, will become the first phase rebuilding currencies and then after (a long time after) some formal currencies will be instituted. What good is gold or silver if there is not a recognized value. To me it would be worthless but to somebody else it could be priceless. That is the whole point of barter and the the main reason for a official currency. Barter is all about "What is it worth to YOU" and currency is about an excepted value to all. If I am hungry, that egg is going to be worth a lot more to me, than that 22 Lr cartridge.

 

[pooky2483]

It will be worth whatever someone is willing to pay (or barter) for it. As will everything else.

That's actually how the price is determined now, it's just centralized.

That's exactly my point, it will hold no exact value, it will be just like having 10 1oz silver coins and 10 1ltr bottles of whiskey (max proof) - They will hold whatever value we hold on them, the silver will just be a bartering commodity. But what exactly can we do with silver compared to the whiskey!

 

[Brent S]

I tend to agree, for me personally, gold and silver really don’t hold much value. I do think they do to most people though, and that’s enough for me to feel they can be of use in trading and barter. I also think that if the US monetary system collapsed gold and silver would still be recognized as a universal currency, both here and in other countries. It has in the past through turbulent times and likely will again.

 

[Brent S]

That's right. During the ammo "shortage" I had to even buy subsonic and standard velocity .22 ammo. There wasn't any high velocity ammo anywhere. Over the last couple of years I've been selling off my stock of subsonic and standard velocity ammo.

It would be good to use for target practice.

 

[DrHenley]

But what exactly can we do with silver compared to the whiskey!

Uh...Carry it in your pocket maybe?

Gold and silver have been used as money and mediums of exchange for thousands of years. There MUST be a reason!

 

[DrHenley]

Time to repost Mike Maloney's excellent video series on "Hidden Secrets of Money"

 

[tmttactical]

Very good video and much to absorb. The first point that really made an impact was the fact "NO fiat money system has ever succeeded". The next was "ALL fiat currencies end up being valued at ZERO". Now I have not been a fan, nor am I a fan of precious metal savings but the video doe make some very good point, based on a prepper time line and disaster prediction. What I mean by the time line event is if you believe the major event is going to hit in approximately the next 10 years, I think it is too late to start buying / converting your expendable cash into gold. You will not have resources to make a significant difference. Consumables would probably be a better investment choice. Now if you are planning for 20, 30 or more years down the road, then I am changing my options to converting most of my expendable cash into physical gold and silver holding. As a rough guess, for very long term planning I would use 25% for consumable items (food,water, sanitation supplies, etc.) and 75% into physical precious metals. Since I visualize an economic crisis, similar to VZ, as the most likely SHTF event to happen, Then I just have to try and figure out if it will fall into the short term prep plan or will it fall into a longterm prep plan. To be honest, I firmly believe the 2020 presidential election will set the stage. If President Trump is not re-elected, then it will be short term planning. If President Trump is re-elected, then I think people could and should shift to a gold standard for themselves. JM2C

 

[DrHenley]

A Democrat President and Democrat Congress will be the end of the Republic. I would not put it past them to impeach Supreme Court Justices they didn't like.

 

[lonewolf]

money of any sort will only be used for a short period post SHTF, maybe weeks maybe months but not long. after that it will be useless, you'd just as well use your paper money to start a fire with and put your coins into a sock and use it as a cosh.

 

[DrHenley]

Yes, old habits die hard, and people will keep using government currency until it becomes painfully obvious that it is worthless.

It will start by some people refusing to accept it, and then more and more people will not accept it until it is abandoned. I'm not sure how long that will take.

 

[pooky2483]

Time repost Mike Maloney's excellent video series on "Hidden Secrets of Money"

They're the video's I'm on about that I've watched.

 

[pooky2483]

Uh...Carry it in your pocket maybe?

Gold and silver have been used as money and mediums of exchange for thousands of years. There MUST be a reason!

Uh...Carry it in your pocket maybe?

Or a wheelbarrow ;-)

Gold and silver have been used as money and mediums of exchange for thousands of years. There MUST be a reason!

I'm not denying that, what I'm trying to say is that in a SHTF scenario, how are we going to actually give a fixed value to gold/silver, as was in Egyptian times.

 

[pooky2483]

I notice that no-one has even mentioned anything about bitcoin or any of the other bit currencies!

 

[DrHenley]

I notice that no-one has even mentioned anything about bitcoin or any of the other bit currencies!

Oh, OK, I'll mention it...

 

[pooky2483]

Oh, OK, I'll mention it...

Huh!
I'm sure that chart is wrong, I've recenly been looking at bitcoin and this the current rate, so I don't know where you got your data from?

 

[DrHenley]

Different scale Pooky. They show exactly the same thing, except mine starts Dec 2017, yours starts Jan 2019.
Mine is on a scale from 0 to 20,000, yours is on a scale from 2400 to 3000 (which makes changes look larger than when viewed on the larger scale).

They both end up around 3000.

 

[Brent S]

I always say, “If in doubt, read the directions”.

 

[pooky2483]

Different scale Pooky. They show exactly the same thing, except mine starts Dec 2017, yours starts Jan 2019.
Mine is on a scale from 0 to 20,000, yours is on a scale from 2400 to 3000 (which makes changes look larger than when viewed on the larger scale).

They both end up around 3000.

Oops. My bad, I'll go sit on the naughty step for an hour ;-)

 

[DrHenley]

This is an excellent example of how the Climate Change fanatics use climate data, BTW. They pick a scale that makes things look exaggerated. But when look at the bigger picture, it shows something entirely different.

(emphasis on "fanatics" I'm not saying all climate scientists are fanatics)

 

[FFairfax]

I didn't see anyone else take a crack at the first question, about why an ounce of silver costs different prices depending on the coin/round involved, so as someone that has invested in silver, I'll give it a go.

Your baseline price for silver (or gold, platinum, palladium, or copper for that matter) is the "spot price". That is the current market value of one troy ounce of the metal in question. At the time that I am writing this, the spot price for silver is currently sitting at $15.51 per ounce. That value will change minute to minute, it is not a stable price. Anything that you pay over spot price is referred to as the "premium". Premiums tend to go up for items that are considered collectible. For example, a generic silver round from the Highland Mint, which carries no face value and cannot be spent as currency, will have a premium of roughly $1.50 to $1.80 an ounce. This is mostly to cover the minting costs, shipping costs, distributor profit margins, etc. By comparison, an American Silver Eagle from the US Mint, which has a designated value as currency (although it's only valued at $1.00, which is ridiculous for an ounce of pure silver), is in higher demand, and is widely collected, and so the premium will be higher (anywhere from $2.50 - $3.50 per ounce, depending on where you buy it). Remember, generally speaking, the more collectible something is, the higher the premium generally will be.

Something to really consider though is that in a SHTF scenario, a treasure trove of 100 ounces of silver or more isn't going to feed you or your family. People likely won't be looking to take it as barter, at least not initially. At least that would be my guess. It's just not practical until some sort of government or order is established and a currency is developed. A lot of people won't know how to value it either...if you watch YouTube videos about it, you'll see some people saying that just 10 ounces of silver could buy an acre of land and a house after some sort of collapse, while other people say that it won't be worth much at all for a long time. Nobody really knows. And if you are stacking silver and gold for a SHTF situation, you will need to think about security, and transportation if you ever have to relocate. 100 ounces of silver or gold gets pretty heavy, and it's going to be bulky and difficult to carry, along with your essential gear.

I hope I helped a bit.

 

[Brent S]

I didn't see anyone else take a crack at the first question, about why an ounce of silver costs different prices depending on the coin/round involved, so as someone that has invested in silver, I'll give it a go.

Your baseline price for silver (or gold, platinum, palladium, or copper for that matter) is the "spot price". That is the current market value of one troy ounce of the metal in question. At the time that I am writing this, the spot price for silver is currently sitting at $15.51 per ounce. That value will change minute to minute, it is not a stable price. Anything that you pay over spot price is referred to as the "premium". Premiums tend to go up for items that are considered collectible. For example, a generic silver round from the Highland Mint, which carries no face value and cannot be spent as currency, will have a premium of roughly $1.50 to $1.80 an ounce. This is mostly to cover the minting costs, shipping costs, distributor profit margins, etc. By comparison, an American Silver Eagle from the US Mint, which has a designated value as currency (although it's only valued at $1.00, which is ridiculous for an ounce of pure silver), is in higher demand, and is widely collected, and so the premium will be higher (anywhere from $2.50 - $3.50 per ounce, depending on where you buy it). Remember, generally speaking, the more collectible something is, the higher the premium generally will be.

Something to really consider though is that in a SHTF scenario, a treasure trove of 100 ounces of silver or more isn't going to feed you or your family. People likely won't be looking to take it as barter, at least not initially. At least that would be my guess. It's just not practical until some sort of government or order is established and a currency is developed. A lot of people won't know how to value it either...if you watch YouTube videos about it, you'll see some people saying that just 10 ounces of silver could buy an acre of land and a house after some sort of collapse, while other people say that it won't be worth much at all for a long time. Nobody really knows. And if you are stacking silver and gold for a SHTF situation, you will need to think about security, and transportation if you ever have to relocate. 100 ounces of silver or gold gets pretty heavy, and it's going to be bulky and difficult to carry, along with your essential gear.

I hope I helped a bit.

You really have to be careful about buying gold or silver. Like you said, prices vary a lot. I really like eBay as you can compare prices. Collectible coins, both gold and silver, can have huge premiums. But there are bullion coins out there. Meaning they are really just the value of the metal. I just got a Canadian maple leaf for 17.00 over spot. They have specials all the time, but you have to watch for them. You should also realize that not only is there a premium for buying gold and silver, there is also a premium for selling it. So if you’re doing it for long term then you’re ok, but if you need to sell to cover an emergency, your likely to loose 15 to 20%. I bought some gold coins several years back for 300 an ounce. With today’s price of about 1300 it was a great investment. The reason I’m bringing this up is the chance of gold going up that much again is slim. It’s high now, not at its highest, but high enough to not likely jump like that again. Another thing you pointed out was security. I had all those gold coins stolen. I still believe that gold and silver will always have value, but am pointing out that it’s not 100% safe. I guess nothing is to be honest. I also believe that prepping is all about covering as many bases as you can. So for me at least, I think precious metals have a place in prepping. And even if they aren’t likely to skyrocket and increase your savings, I think they are safe enough to at least hold value and hedge your assets from loss of value.

 

[FFairfax]

I definitely agree with your point on selling. I didn't even touch on selling because in a SHTF situation, good luck finding any buyers (in my opinion). But yes, if everything doesn't fall to pieces, and you want to sell, you need to be careful about where and to whom. I deal primarily in silver, so that is where all of my knowledge is when it comes to precious metals. If someone were to buy a roll of American Silver Eagles today (they come in rolls of 20, for those not familiar), you'd need the spot price to jump up roughly 5 dollars per ounce before you'd be able to turn a minimal profit, because all a coin shop is going to give you is spot price when you go in to sell. (Some coin shops might give you 50 cents to a dollar over spot, particularly if you've built a relationship with them over time. But not all will.)

I absolutely agree that it has a place in prepping, depending on what it is you are prepping for. As another poster said, silver and gold have always had value as currency, while our fiat money only has value as long as people believe that it does. But it just depends on the scenario. If things completely fall to pieces, and I have to pack up and go up to the top of a mountain to survive, I'm probably leaving my silver behind. If on the other hand it's the collapse of the dollar, but civil order is maintained (or at least reasonably maintained), then I'll do my best to keep it on hand, so that when a new currency is established, I can transfer some wealth into the new monetary system.

 

[DrHenley]

I collected all sorts of silver, but I finally came to the conclusion that the best way to stack silver was with "junk silver coins". That doesn't mean totally worn out coins, those are called "cull silver coins." It means circulated 90% silver U.S. coins with no special collector value. Some are in almost mint condition, some are worn. The reason I think that is the best type of silver to stack is that the coins are instantly recognizable to everyone as "money" and have well established face values to help people decide what they are worth, and won't depend on government backing to have some value. And if you look hard enough, you can find them for not much more than melt prices. You won't be buying houses or land with them, but you can buy small things with them. I'm thinking maybe a cup of coffee for a silver dime, something like that.

Here is some "junk silver"

 

[DrHenley]

And for stacking silver "bars", I like the "Hockey Pucks." 5 ounce pure silver America The Beautiful quarters, which are difficult to counterfeit.