Letter Re: Food, Nickels, Silver and Gold.

[Ponce]

People will always want to trade something for something and if the other person don't want what you have then he (or she) can alway get your silver in order to get from someone else what they might need.
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Letter Re: Food, Nickels, Silver and Gold.

Mr. Rawles:
Like the ridiculous commercials touting Internet stock trading in the recent past, today the sheeple are treated to commercials extolling the wisdom of investing in gold, all the while the economic world is apparently heading for a meltdown of epic proportion.

As an ardent fan of your novel "Patriots" and a daily reader of your site, I must question the wisdom of investing in either physical gold or rolls of nickels as one will not be able to eat either. And frankly, if someone appears at most doorsteps offering either as payment for goods or services after the proverbial SHTF, I would believe said traveler would more than likely walk away disappointed and still hungry. I believe in the wisdom of investing in tangible goods that can be used in some form or fashion along the lines of food, ammo, etc.

How many folks even know what they are looking at when presented with shiny, gold jewelry as an item of barter? Let's face it, the average person has little or no knowledge or means to determine the value of shiny baubles and coinage while true tangibles can quickly be assigned value in today's world and tomorrow's. Furthermore, I must admit the amusement of picturing said travelers hauling ammo cans full of nickels around while wondering what it was they left behind which could have helped put a little food in their bellies either thru trade or application. Respectfully, - Jon in New York

JWR Replies: You are mixing two concepts: survival preparedness and investing. For more than 10 years I have warned people that they need to get their "Beans, bullets, and Band-Aids" squared away before ever thinking about doing any hedging with metals. Food comes first!

I'm also on record as stating that common caliber ammunition will be a better barter item than silver coins in the event of a severe crisis. You can't eat precious metals, but ammunition will be recognizable and sought after because it can both help provide self defense and be used for hunting. Furthermore, I'm a strong advocate of investing extra funds in silver rather than gold. Just read the "For an Ounce of Gold" chapter of my novel "Patriots: A Novel of Survival in the Coming Collapse". I first drafted that chapter in 1990. My position hasn't changed appreciably since then. Here is a brief except:


Next, Kevin reported on his transactions. "I got an entire buffalo hide in really good shape for 10 rounds of .30-06. I figure that it'll help keep us warm up at the LP/OP next winter. Another guy traded me a small Bearcat scanner--one of the portable ones the size of a walkie talkie--for 20 rounds of .45 ACP. It runs off of batteries, and we have plenty of ni-cads, so I thought, 'why not?' Not many people have any source of power nowadays. I figure that's the only reason the guy was willing to sell it so cheap. I also got a pair of Belgian white rabbits--a buck and a doe, for 25 rounds of .22 long rifle. My mother would be proud. She'd say that I got 'Such a deal!' The cage for the rabbits cost a lot more, though. For it, I had to give up a whole 50 rounds of .22 and three pre-'65 silver quarters. I think it’s amazing what a few silver dimes or quarters will buy."

After a pause, Kevin said, "I feel sorry for all those people I knew who bought one ounce gold coins as a 'survival hedge.' I can see now that a full ounce gold coin is too compact a form of currency, and it isn't easily divisible. I suppose that people who bought the gold coins minted in the one tenth of an ounce weights are more fortunate. What would a full ounce of gold buy? That Corvette that we saw advertised? A half a dozen cows? Maybe. It certainly wouldn't do much good for someone trying to buy day-to-day necessities. It’s pretty apparent that our stock of .22-rimfire ammo is a lot more useful as a store of value and as a means of exchange." [End quote]


For those that already have their survival preparations squared away, some hedging with metals is indeed appropriate. The alternative is to watch our savings consumed by currency inflation. We cannot store our net worth in the form of food. Unless the economy is totally destroyed and doesn't come back within a generation, then metals will have utility. But again, it will be silver, not gold that will be better for barter. The chances of a total, multi-generational "wipe out" are microscopically small. That is just about the only situation where metals investing would be folly.

On a related note, SurvivalBlog's poet laureate "George Gordon" just forwarded me some commentary by Gary Gibson posted over at Whiskey and Gunpowder that echoes what I've been recommending for three years: Gold, Silver, Copper, Nickel and the Slow Death of Money. And today I noticed this new article: Today’s Best Investment…Rhymes With Pickles. So it it is clear that I'm no longer a lonely voice in the wilderness that recommends socking away some Nickels as a hedge on inflation. Wake up, folks! Nickels are already worth 145.35% of their face value. I can't think of many other investments with that sort of assured gain, starting on Day One.

The mass inflation that I expect in the next few years will quickly destroy the purchasing power of the U.S. Dollar, and will quickly propel the value of Nickels to thrice their face value, and beyond. In essence, when paper money starts to become worthless, then even base metals will be seen like precious metals. The alternative is holding paper currency that is not even suitable for toilet paper, because it is unsanitary. At least for as long as you can continue to obtain Nickels at face value, they are a good investment. That is abundantly clear.

http://survivalblog.com/

[chad]

i don't believe in trading au + ag for stuff, bartering with it, etc.

i believe in hunkering down until the nightmare is over, then trading it in for whatever the next currency is going to be for the next 40 years and rebuilding.

[Twisted Titan]

Wake up, folks! Nickels are already worth 145.35% of their face value. I can't think of many other investments with that sort of assured gain, starting on Day One.



Holy smokes....... its 1965 all over again

[Ponce]

Chad.........you are right on that, PM will shine the most when rebuilding.......but.......meanwhile you have to eat........specially if you are no longer working as I am........because I have the seeds and land I will go half and half with a farmer who is willing cultivate my land and produces something.

Titan?.......don't think of only the "nickels" but also about ALL the coins..........I have spoken ;D

[keehah]

Informative article. People least want to use the local currency, the bolivar, and local conditions decide what is most commonly used instead, in some areas that is gold.

financialpost.com: In Venezuela, people break off flakes of gold to pay for meals and haircuts (https://financialpost.com/news/economy/in-venezuela-people-break-off-flakes-of-gold-to-pay-for-meals-and-haircuts)
Local currency, the bolivar, has been rendered almost worthless by hyperinflation

Oct 20, 2021
To fathom the magnitude of Venezuela’s financial collapse, travel southeast from Caracas, past the oil fields and over the Orinoco River, and head deep into the savanna that blankets one of the remotest corners of the country.

There, in the barber shops and restaurants and hotels that constitute the main strip of one dusty little outpost after another, you’ll find prices displayed in grams of gold.

A one-night stay at a hotel? That’ll be half a gram. Lunch for two at a Chinese restaurant? A quarter of a gram. A haircut? An eighth of a gram, please. Jorge Pena, 20, figured that eighth came to three small flakes — the equivalent of $5. After getting a trim one recent weekday in the town of Tumeremo, he handed them over to his barber, who, satisfied with Pena’s calculation, quickly pocketed them. “You can pay for everything with gold,” Pena says...

[T]he dollar has become the de facto choice in Caracas and other major cities. Along the western border with Colombia, the peso is the dominant currency. It’s used in more than 90 per cent of transactions in the biggest city in the region, San Cristobal, according to the research firm Ecoanalitica. Down on the southern border with Brazil, the real is often the currency of choice. And the euro and cryptocurrencies have their niches in parts of the country, too...

Today, only the poorest Venezuelans — those who lack easy access to dollars or other currencies — still use bolivars. “People prefer any currency over the bolivar,” Leon says.

In parts of southeastern Venezuela, that currency is gold...

The small-time operators of illegal mines typically pay day labourers in nuggets, so there’s plenty of bullion to be had. That steady supply, coupled with internet reception that’s so shoddy that digital transactions are nearly impossible, makes gold the least-bad option for locals.

They use hand tools to break shards off nuggets and then carry them in their pockets, often wrapped in bolivar bills — one of the few remaining uses for the currency. Stores have small scales, but some shopkeepers and consumers feel so comfortable handling the metal at this point that they evaluate the flakes by sight.

To the uninitiated outsider, this sounds wild.

How can authenticity and weight possibly be determined with a mere glance from someone untrained in the ways of mineralogy? Gold experts, though, back what the locals say: You just get a feel for it over time.

“Gold is an element,” explains Juan Carlos Artigas, head of research at World Gold Council in New York. Unlike diamonds, which are hard to evaluate, gold “has intrinsic characteristics, and there are specific things you can look for, especially in smaller pieces.”

The use of gold is slowly expanding into nearby cities, including Ciudad Bolivar, the state capital nestled along the banks of the Orinoco. Miners regularly travel there to sell their bullion when they want to cash out, and stores in shopping malls exchange it for dollars.

But back in mining towns like Tumeremo, there’s little need to carry anything other than gold.