Urban Survival Planning – Too Late to Buy Gold or Silver?

We had a recent conversation with a man in his early 50’s. He is currently working as truck driver and is an Army veteran. He, like us, are concerned with the direction the country is heading, and accordingly to him, has long thought about trying to be prepared for a TSHTF Urban Survival type scenario. His current Survival Preparation is centered around having a few firearms and sufficient ammunition and other Survival Gear and Equipment like Sleeping Bags, Cold Weather Clothing, etc.

Our talk turned to financial planning and inevitably to gold and silver. He thought that it is too late to buy Gold and Silver and also rationalized that commodities will be worth more in a barter type environment that Gold or Silver.

He is wrong on one count and half right on the other.

We cannot envision an environment where it is too late to start buying Gold or Silver. Obviously the idea is to buy it at the lowest possible prices, but today’s high prices may be tomorrow’s low prices. As we write this, Gold closed at $1,118 an ounce, Silver at $16.31 an ounce. A pre-’65 Washington Quarter on Feb 8th, 2010 was worth $2.74 at Silver melt prices and a Morgan Silver Dollar at $11.71 Silver melt prices. On Feb 19th, 2010 those same coins were worth $2.88 and $12.34 respectively.

Now we’re not saying Gold and Silver are going up and will never come down. What we are saying is that you cannot predict the market and you cannot afford to wait until prices are where you want them to buy Gold or Silver. Buy what you can, when you can. If your budget only allows the purchase of a roll of pre-’65 Roosevelt Dimes – well, that’s better that not having any Silver at all.

Our friend was half correct when he said commodities or what we call barter items will be much more valuable in a TSHTF Urban Survival type scenario. We think there will be three phases of “Survival purchasing power” following a catastrophic event that plunges everyone into a Survival mode.

The first phase of Survival purchasing power will be paper cash. It will help to have cash on hand as some people will undoubtedly not accept credit or checks but will believe the situation will come back to normal before too long and these people will seek to profit from the situation by charging exorbitantly. So have some cash on hand. We can’t tell you how much,….maybe a starting point would be $1,000 in $5, $10 and $20 bills.

The second phase of Survival purchasing will Gold or Silver. People who will not take paper cash will most probably take Gold or Silver in exchange for commodities or services. They may not know the closing value of Gold or Silver but nonetheless history shows us that Gold and Silver has long been an acceptable world wide currency.

The third phase of Survival purchasing will be barter based on commodities. We will do a post, in the near future, devoted solely to the acquisition and storage of barter items. Some people may still take Gold and Silver but commodities that cannot be acquired anymore will have an exceptionally high value.

We cannot even begin to estimate the duration of these three phases of Survival purchasing. The cash phase may last one day or it may last 2 weeks. The Gold and Silver phase may last one month, maybe three months or continue forever. So, the bottom line is that it is not too late to buy Gold or Silver, just buy it in amounts you can afford – some is much better than none, and, to be prepared for all phases of Survival purchasing - cash, Gold - Silver and Barter items.