Should I Buy Gold for SHTF?

I recently had a friend of mine, not in my immediate survival group, but a prepper none the less, ask me if he should buy some Gold, and if so, should he buy one ounce rounds, or smaller weights. He had around $6,000 to spend. Part of his question was should he wait awhile as Gold and Silver prices seemed to be going down.

I told him that trying to time the market now would require some constant observation and some luck. Sure, Gold and Silver may yet go down more, in light of some good economic news the last few weeks, but that "good" economic news was really just "not as bad of news as usual".

I told him that while the Greece, Italy and Spain economic problems seemed to have leveled off, we will certainly see more bad economic news in the very near future. I told him to watch for more banks defaulting, instability in the U.S. and Foreign exchanges, higher U.S. deficit and national debt, worsening unemployment, lower oil imports, higher oil prices, higher inflation and downward spiral of the housing market all would be factors signaling a rise in precious metals.

This conversation was about two weeks ago and now we are seeing the following headlines:

World stocks fall amid economic reports from the largest economies forecasting a global downturn.

Job growth much lower than expected and fears of heightening unemployment amid reports that applications for unemployment benefits jumped to the highest level in nine months.

Housing gloom ahead as sales of previously owned homes fell 1.5 percent in May and are forecsted to be even lower in June and July.

Eurpoean leaders are trying to work out a solution to a spreading financial crisis across the European Union and global lessening confidence in a solution and the value of the Euro.

Major banks being downgraded. Moody's lowered the credit ratings of 15 major banks, including Bank of America, JPMorgan Chase and Goldman Sachs, saying their long-term prospects for profitability and growth are shrinking.

So yes, the time is right to buy Precious Metals. However I would not put all of the $6,000 into Gold. I would spread it out with Silver bullion and maybe some junk silver as well. All this would depend upon how much precious metals I already had and any other holes or lack of essential equipment, material and supplies in my Collapse Preparation Plan.

Maybe one ounce of Gold, 4 one-quarter Gold rounds, $1,000 into Silver rounds and the rest in long term food maybe a good choice for my friend as I know he primarily focusing on survival guns and gear for SHTF and is well preparaed in that aspect.

Him having some viable precious metals for bartering and some long term food would also possibly benefit me as he is one of the families on a short list my survival group keeps of possible recruits or straphangers we would accept into our group as his ethics, morals and skills are known to us. Anyway, if you don't have very much or any precious metals at all, then what are you waiting for? An invitation? Okay, consider this an invitation.

Copper: The Other Precious Metal?

Received an e-mail from Henry who wrote: "What do you think about savings pennies for their copper value. One of my friends told me that the one cent penny is now worth 5 cents as copper scrap metal."

UrbanMan reply: Henry, you wrote me over three weeks ago and to be frank I did not think I would reply, until I saw a recent article on the internet talking about potential legislation in Congress that may result in the abolishment of the penny as currency. Until then, and only then can pennies be legally melted down for their copper value.

But not all pennies are made of copper. Pennies made in 1982 or earlier have 95% copper. Pennies since then are made mostly from zinc. The current value of a copper penny is around 2 1/2 cents.

Copper has a lot of scrap value, otherwise you would not be seeing copper related thefts of copper wiring, construction sites, phone facilities, etc. As I write this copper scrap is valued at $3.57 per pound.

Going back to the value of a copper penny, 150% of it's face value, is substantial, however you would need a truck load of it to make any substantial money once or if the legislation is passed to abolish the penny. Plus it is just so heavy as to not be practical. I even know gents who have taken very substantial amounts of silver and converted it to Gold to reduce the weight to value ratio.

I think you would do okay just to save what you normally get in pocket change. I do this and routinely fill a jar which I take once a year to the bank to convert to dollars. My average yearly conversion is just shy of $200. A little mini- windfall which contributes to my survival stockage as ammunition, or helps buy a new gun or long stay food.

You could collect copper pennies, again 1982 or before, and sell on e-Bay as some people do. I would recommend however that you put your precious metal collection efforts into Silver and/or Gold. My efforts are concentrated mostly around the buying of silver coins for their silver melt value, one or two ounce silver rounds, or, five ounce bars.