Gold and Silver - Perceptions Changing

UrbanSurvivalSkills received this comment from Anonymous…… ”I remained unconvinced that buying Gold or Silver is a smart move. Historically the prices have fluctuated, caused by the filthy rich people buying and selling large amounts to make enormous profits. Anyway, the ratio of Gold to Silver is constantly changes so people can lose their ass buying silver when it will be devalued against gold. If there is a really bad SHTF situation then all commerce will be conducted by either hyper-inflated dollars or through simple barter or trade goods. I also think there are people who are not thinking clearly about what can happen and scaring them into buying Gold and Silver is doing them a disservice.”

UrbanMan’s reply: Everyone has to make up their own mind on the value of owning precious metals, Gold and Silver, or even silver coins for their silver melt value. I know people in my income group who have spent 4x or 5x the amount I have spent on Gold and Silver. Obviously they value precious metals more; think that during a collapse or SHTF situation that it will be extremely valuable to own; or they are thinking about coming out of a collapse and beginning over with a lot of wealth.

I approach buying precious metals, overwhelmingly Silver, as a hedge against the projected worthlessness of paper money during a collapse and as a way to buy necessary items when barter or trade is not feasible. While I prefer Silver not to lose it’s value as I eventually want the world to return to normal and to pass off my Silver bullion and Silver coins to my family, it does not matter too much to me if silver drops to $10 an ounce. Once an economic collapse occurs, the value will certainly rise significantly. I simply own it to be provide a possibility of commerce after SHTF. I would much rather trade in Silver than in food or ammunition.

If you don’t want to procure precious metals, primarily Silver, as a contingency during hard times then that is your business. I just think the suggestion of making this decision after considering all the facts including historically use and value or precious metals; type of collapse and after affects we may see; and your current state of preparation.

Here are some facts from http://dollarcollapse

The US Mint sells about the same dollar amount of gold and silver coins, which means it sells 50 ounces of silver for every ounce of gold. UrbanMan’s notes: Today’s current prices were (approx): Gold/ounce $ 1,715.00 Silver/ounce $ 33.00 This is a near 52 to 1 ratio.

Ten times more silver than gold is produced each year, and the ratio in the earth’s crust is 15:1, so how can the price be 50:1? Expect a return to the historical norm of 15:1, which implies that silver will outperform gold.

The paper silver markets trade a billion ounces a day and the world only produces 900 million in a year. The amount available for settlement of these futures contracts is something like 1.5 million ounces, ludicrously little compared to the amount of paper. On the physical side most dealers are only seeing buyers not sellers. There are a lot more people who can afford a one-ounce silver coin than an ounce of gold.

UrbanMan’s notes: Consider this as well -

Today’s (Oct 2011) fuel prices were $3.55 a gallon and Silver is $ 33.00 an ounce. So one ounce of Silver would allow you to buy 9.3 gallons of fuel.

One year ago (Oct 2010) fuel prices were $2.90 a gallon and Silver was $ 23.00 an ounce. This would allow you to buy 7.9 gallons of fuel.

Two years ago (Oct 2009) fuel prices were $2.80 a gallon and Silver was $ 17.25 an ounce. This would allow you to buy 6.2 gallons of fuel.

One more thing: Roger Wiegand of www.TraderTracks.com posted the following alert: "Chances of a major problem in Europe have escalated. Chances of huge precious metals moves in this last quarter of 2011 are very good. I am not talking of $60 in one day but perhaps a huge run from this morning’s gold futures at $1707 all the way to +$2,000. There is no where to go with money if bad things happen in Europe except physical PM and quality related shares. I would not touch any kind of bonds and the only stocks of merit are those juniors holding 2-3 three years of corporate cash with good prospects.

Also the intermediate and larger gold companies should be protected and do well. THIS WEEKEND IN THE USA IS CRITICAL. If SOMETHING GLOBAL BAD HAPPENS. It would probably hit after the markets are closed this Friday. Again, I caution everyone to hold a minimum of one month’s cash, fuel and other provisions. This is not a game. This is very serious and in all likelihood nothing happens. But not make a mistake disregarding this apparent danger."

I hope you are not alleging that I am either scaring people into buying Silver. I have nothing to gain from this. I am simply rendering my opinion. What is right for my Survival Plan is to procure Silver both in bullion and in coins for Silver Melt value. Even then the ratio of my silver procurements is much lower than most of the other Survival Preppers I personally know. I am just trying to cover all the bases. But by and large most of my resources are going into food and other material as well as alternate energy. I have bought several solar power kits when they are on sale – and these are for barter. I have bigger units and small man portable solar power solutions for my groups own use.

Survival Planning - More Debate on Having or Not Having Precious Metals

Anonymous has left a new comment on your post Survival Planning - The Argument Against Precious Metals: "Let me explain why "profit" entered into the discussion of buying silver or gold. I held a substantial amount of gold and silver for about 22 years. I did finally sell it at a profit and I'm happy I did. Had I invested it during those "go-go" years I would have about four times as much money from that investment. I don't care if you are rich or poor having four times as much money to prepare for bad times is, well it's four times better then what ever you have. Until you have held your gold and silver for 22 years with no chance to sell it at a profit or even break even then you do not know about the second thoughts and self doubts.”

“During the entire time I held that gold and silver I NEVER had a year’s supply of food. Today I have a lot of food and a lot of other preps but no gold and silver. Ask me if I believe I am better prepared today or when I had 150 pounds of precious metal in safe deposit boxes!!! Now, I believe in PM's and if things get really bad I am willing to trade some food for junk silver, silver rounds and gold. I am not willing to buy another 150 lbs of PMs and wait another 22 years to get my money back. At some point in the future things will get better (I hope! They could get so bad we are all dead). But if things get better it is likely all of you who invested in PMs will get the opportunity I had and that is to hold your PMs for years and years without any hope of ever getting all your money back.”

UrbanMan replies: Okay “Mr. Anonymous I don’t believe in PM’s”, your point is taken and certainly valid. My plan is to have PM’s pre-need, meaning I am holding mostly Silver, junk and bullion, in case the dollar collapses and I need to buy something when fiat currency is not accepted.

I am not holding such a vast amount as to put a burden on me if I have to execute an emergency Bug Out.

At some point we preppers prioritize our procurement and readiness, however I am comfortable with the amount and types of food I have put away; the type of firearms and amounts of ammunition I own; and the general other preps I have undertaken.

I just think we are looking at PM’s from different perspectives: You - as a valid or invalid investment; and me - as a small part, but a necessary component of an overall SHTF insurance plan. I hope this is all for nothing,...I hope to pass my silver bullion, silver coins I have compiled for silver melt value and the tiny amount of gold I have onto my family decades from now.

Urban Survival Planning - Gold and Silver just an Anchor?

UrbanSurvivalSkills.com received a comment from Anonymous on the article Survival Planning - Validity of Gold/Silver in Trade or Barter....."I have purchased more gold and silver then you can carry, twice as much as you can carry. I held it for 20 years, no exaggeration. When prices went up I sold it and was so happy to get my money back and make a profit. Even so I could have made more if I had invested it or put it in CD's. A little gold or silver bought at a bargin price is insurance or even an investment. A lot of gold and silver at any price or a smaller amount at a high price is like an anchor."

UrbanMan replies: Have to disagree with you here for the most part. Sure, if you sink all of your available liquidity into Gold and Silver then it can become a problem several ways: finding vendors to cashing it in or accept it in trade in this current economy; or even moving and/or safeguarding a weighty amount.........unless your primary reason is that you have bought your Precious Metals in support of a collapse survival plan.

That's what I have bought my Silver for. Last month when Silver was briefly $50 an ounce, I could have sold all the silver I bought for less than $5 an ounce and made a 500% profit (someone please check my math!). However, I bought that silver and continued to buy small amounts over the years so I would have some way of purchasing necessary items when cash, or what we call fiat currency, failed.

But it certainly is interesting that some financial institutions and higher institutes of learning have taken physical possession of the PM's. In some cases that weight amounts to hundreds of thousands of dollars of annual storage and security fees. Why would they do this if they felt Gold and Silver were an anchor? Why would they incur the storage and security costs unless they thought there was a possibility of not being able to take possession at a later date?

Just food for thought and of course all this depends upon one's definition of how much, weight wise, is enough,...or how much weight wise is too much to safeguard or transport. Certainly if you were located in your final Safe Location than storage in safes and hidden below ground caches would be an option.

Thanks for your comment and chance to think. After all, if we do not analyze the problems and develop workable solutions, considering the threats and the environment, then we have a good chance of missing something.

Urban Survival - Silver and Gold Predictions for 2011 and Beyond

UrbanSurvivalSkills.com received this Anonymous comment from the Post titled "Are Gold and Silver Going to be Worth Anything?". When you need gold and silver they are valuable. When you need food, gold and silver might or might not be valuable. I can tell you from experience that every commodity has it's up's and down's. It certainly looks like PM's will continue to rise, but as sure as the sun will rise in the morning one day the PM bubble will burst too. Not saying don't buy PMs just saying be careful.

UrbanMan replies: Roger the being careful. Being careful in my book is multi-fold. It includes NOT leveraging all my available cash to buy silver or gold. It DOES include buying some silver to ensure I have all my Survival Plan bases covered.

Put it this way,...as of right now, knowing the collapse possibilities (TEOTWAWKI) Which person would you rather be:

Person A: Twelve months of food and one rifle.

Person B: Six months of food and one rifle, saving enough money to buy some silver, water purification filters, Survival gear, medical supplies, etc.

Sure, some people will say,...with food I can barter for anything else I need.   Yes that's partial true,......if it is available and that other person wants to trade.

I think the idea, in my book, is to be as prepared as you can afford to be, across the board as required against the threats you have wargame as likely.

In the below radio interview, James Turk, talks about his predictions for 2011 and from 2013-2015. Turk predicted that there was a 20% chance for Silver to hit $50 a ounce in 2010. He says that in 2011 that possibility has increased significantly that we'll see $50 an ounce Silver and Gold at $8,000 an ounce.

By my calculations, with Gold at $8,000 an ounce,..Silver should/would $200 an ounce, based on the current 40 to one ratio.

I'm NOT looking at like "Holy Cow, in the event of TEOTWAWKI, I'll be rich!", .....I am looking at it like "Jesus Christ, what kind of world would we be living in at Silver being $50 an ounce or more? Will food be available and at what cost?; What's the Security situation going to be? I need some Silver in order to buy the things I may need to assist in Survival".

The Gold to Silver ratio is now 40 to one. The historic ratios are more like 16 or 20 to one. Currently th 40 to one ratio is falling making Silver more valuable percentage wise than Gold.

Anyway, would it too redundant to suggest everyone have some Silver put away? I also suggest Survivalists make good use of the internet, particular financial blogs, and You Tube videos, to enhance their understanding of the current crisis. Most often, I play a video or audio while I work on something else and when a comment or key word grabs my interest, I'll go back and watch/listen more closely. I guess this is the Survivalists version of multi-tasking in a research and planning scope.

Urban Survival - Are Gold and Silver Going to Be Worth Anything?

UrbanSurvivalSkills.com received the following question: "I understand the desire to have gold and silver in your stock of survival gear, which I do, but the more I think about it the more I wonder about the true usefulness of it. If the SHTF tomorrow or even 10 years from now, why would someone care about a small metallic coin over trading what they really need like food, water purification tablets, ammo, a rifle, gardening tools etc.? I mean the only value in a small silver coin is what the person on the other end of the deal values it at? I am the first to admit that they are small, can be carried in some quantity easily, but from my perspective, what do I care about getting 2 silver fishing weights when what I really want is some toilet paper. (Just an example on the TP by the way).

Would people REALLY want gold or silver when their world comes crashing down around them, or are the basics food, water, shelter, protection and the items associated with them a better bargaining chip? Wouldn’t I be better off stockpiling .22 Ammo or toilet paper or for large deals an extra firearm or two? Thanks."

UrbanMan's Reply: I think Gold and Silver,...or just Silver for most people, are going to have value in two separate phases of a collapse, and possibly, throughout the collapse depending upon collapse, infrastructure and economic factors.

First of all, at some point in the collapse, dollars will be worthless so the exchange of goods and services will be fueled by precious metals or trade goods. PM's could be the commerce unit of choice for 2 days, 2 months or may never end. At some point in the collapse, when food and other essentials become scare, the value will shift to these items. Then we'll see people saying "Gold? Who the hell wants gold? I want food!"

In all societies throughout history an monetary exchange system has been developed, this has historically been Gold and Silver. Afterall, what started this whole mess was the Government coming off the Gold standard for the U.S. dollar. So I think you'll see Gold and Silver being valuable, at some point as the collapse levels off and/or commerce starts to begin again.

The last reason is akin to why that big fat liberal George Soros has reportedly went into a high density Gold buying spree.....because if the collapse isn't too bad and this country does come back, there will be wealth re-distribution. If you are owning Gold and Silver you will be sitting much more prettier.

The bottom line is that to be truly prepared for Survival, you need a location to provide safety and shelter; a Bug Out Plan to another safe location; you need stocks of food, water in order to live; firearms, ammunition and the will/skill to use for protection; and an ability to barter for things you need,....some of the people who have something you need may not take anything other than precious metals.

And one more way to look at it. I'd rather have ounces of silver in my gun safe than to count on my 401K money being there or my ability to get money out of my bank account during the collapse. Plus, that fiat currency from the bank is going to continue to dminish in value whereas the gold or silver wil increase. So if you have traditional savings, like in the bank,...money market, CD's or a 401K - it would not be a bad idea to change some of that into gold and silver kept on hand.

The last thing you mentioned is possibly stockpiling ammo and other items for trade. Absolutely a great idea. I keep many items for possible barter,....I have a kit bag full of clothing and gear and buckets of trade items like butane lighters, tarps, clothing items, hand tools, etc. And in fact I just traded two 20 gallon barrels for 6 five gallon water cans. While most Survivialist may not believe in trading guns, since they may be turned against you, I still have the capability with a couple cheap .22 LR rifles and if conditions are right will used them for trade.

Thanks for the question. Prepare well.