The current slide of Gold (and Silver) prices which now appear at this post time to be possibly be inching up again, nor reports of Gold scarcity from purchases by foreign governments (read Chinese among others) have nothing to do with the Survivalist's need to have some gold and silver on hand as an essential component of their collapse plan. Let me say that again,....all the hoopla around Gold and Silver, .....as investments, as hedges against inflation, or to protect against deflation of the dollar have nothing to do with the the need for preppers to have some precious metals on hand, be it gold and/or silver bullion, and/or coins for silver melt value just to have some type of buying power after a economic or financial collapse.
It has been reported by several respected financial analysts that China and India alone account for almost 80% of the annual Gold purchases. Add in Russia's new focus on building national wealth through Gold purchases does not leave much for the rest of the world. There have also been reports that the U.S. is vastly overstating the Gold Reserves that the Federal government holds. Nice! In some minds this makes it more likely that the U.S. Government will develop some sort of regulation on physical precious metal holdings and even a confiscation program under the guise of national security, a la F.D.R.
In my mind, damaged as it is, I draw a difference between a economic collapse and a financial collapse. In short, an economic collapse would be commodities driven with shortages (fuels and food among others) and skyrocketing prices driving food riots and the projected government attempts to control the mess. On the other hand a financial collapse would be a collapse of the dollar, a tanking of Wall Street reminisance of the Great Depression, or a possible attack on our banking systems and networks.
I don't expect many people to agree with me on the above definitions, but that's how I have to cateogorize these real threats in my mind and in my speech to predict possible scenarios.
Back to Gold and Silver. So again, the market forces, large foreign government buys and investment advice all have nothing to do with the need for the totally prepared survivalist to have physical gold and/or silver on hand as purchasing power if and when the dollar holds no more value, or is even perceived to hold no more value and people will refuse to accept it for transactions.
I fully realize that most people cannot buy Gold as it is prohibitive expensive to buy much if any at all. Gold closed on Friday 19 April at $1,392.70 an ounce while Silver closed $23.30, so Silver is the poor or average man's precious metal.
Two of the questions I get asked the most regarding keeping cash and precious metals on hand, are:
"How much cash should I keep on hand?"
Well how much can you afford to keep on hand? I know a guy who, every two weeks at payday, takes all his money out of the bank except for the mandatory minimum enough to pay bills. While I don't advocate this, I do admire this guy for the committment he has, as he has been doing this for three years now. No telling how much cash he has at home! And no, you can't have his address.
I believe that upon the imminent and actual collapse of fiat currency there will be people accepting cash for a short period of time,...until food runs out or until it is clear that fiat currency won't be making a comeback anytime soon.
Just like noted financial guru Dave Ramsey advocates an emergency fund, I just think this emergency fund should be partially kept at home if you can take measures to safe guard it.
"How much precious metals should I keep on hand"?
Again, how much can you afford? I have a very small amount of gold. SIlver is the poor man's precious metal and taking last week's closing price of $23.30 and not counting the premium you pay for rounds or bars, 100 ounces would cost you $2,330.00
Starting from nothing, if you bought 2 to 4 ounces a month after a year's time you would be a quarter to half way towards 100 ounces. I think that's a decent target goal. If you can afford mre then go for it. That advantage of buying small amounts at local sources, and paying cash, would keep you under the radar for both robbery and confiscation,...sorry about being redundant,..I should have just said robbery.
So just like that AR-15 you have in the closet and hope to never use for real, Gold and Silver fill an emergency need as well. Consider putting some away.
Showing posts with label gold and silver for the collapse. Show all posts
Showing posts with label gold and silver for the collapse. Show all posts
Monday, April 22, 2013
Thursday, April 18, 2013
How Will a Cashless Society Affect Survivalists?
This is part of an article entitled "Winds Of Digital Change" by Bob Rinear, that was sent to me by a retired investment banker who is now an avowed prepper moving from the North to establish a home in Northern Arizona awaiting what he believes is the economic collapse of America. I am posting this to stimulate thought on how a cashless society can effect our ability to prepare to survive. I'm not too worried about having digital money after a economical or financial collapse as digital money will give way to barter or dealing in preciuous metals - hence the need to own physical gold and silver - but the longer we live in a cashless society, the greater of an impact, a negative impact, it will have on our preparations.
There's absolutely no doubt that at some point in the future, they are going to abandon the idea of "cash" and all transactions will be done with a swipe.
Consider "money" for a while. It has been around in one form or another for thousands of years. When the first coinage was used to "buy" goods instead of using the barter system, there's no doubt that several things happened. One is that it became stupendously easier to get what you wanted or needed. But by association it creates a massive boom in "business". For instance let us suppose you were the farmer and you had hundreds of cows and steer. Well you might want to get a pair of pants or some boots. But the shoemaker didn't want a milk cow or a steer. So you guys couldn't do a lot of business and your feet still hurt. Once the concept of using coins (lets just say currency) really took hold, you could buy your pants and boots from the Shoe maker, and the house builder could "buy" your cows and meats. The velocity of business increased exponentially. Expanding that, all forms of increasing "good" took place.
People could "buy" books and pay tuition to schools. They could easily pay for musicians to play for their parties, etc. Education exploded, the arts became more widely accepted.
Money was a darned good thing.
Then of course there came a time when they figured out that carrying gold around was a bit of a pain, and the first concepts of "currency based on gold" was issued. This was the first good stabs at "currency". The idea being you'd use a slip of paper with a number on it as your vehicle to buy something. The paper "note" would correspond to an amount of gold you could exchange the note for if you wished. While many credit the Europeans for coming up with this and to some extent they were very important as to it's ultimate adoption, the Chinese began the practice 2000 years ago.
The Song Dynasty in China was the first to issue paper money, called "jiaozi", around the 10th century AD. Although the notes were valued at a certain exchange rate for gold, silver, or silk, conversion was never allowed in practice. Then, the successive Yuan Dynasty tried again and was the first dynasty in China to use paper currency as the predominant circulating medium. The founder of the Yuan Dynasty, Kublai Khan, issued paper money known as Chao in his reign. The original notes during the Yuan Dynasty were restricted in both area and duration as in the Song Dynasty. (notice that even today most will call the Chinese currency the "yuan" instead of the Renminbi which is its actual official name).
Of course you all know that here in the states President Nixon closed the "gold window" which basically severed our currency from any backing what so ever. We became "fiat" meaning that our currency was only backed by Uncle Sam saying it has value. It couldn't be exchanged at the banks for gold any more. Since that time, we've seen all manner of things happen, just as they have in the past. They PRINTED ever more gobs of the stuff. Well guess what? We've seen all that before. All of it.
The Romans printed money, the Greeks, the Argentineans, the Germans, you name it. All through history they have printed more money than they had "metal" (gold or silver) to back it and it always ended badly. It has only been in the past 45 years that we've embarked on what amounts to a completely "fiat" global situation. No one's money is backed by anything any more. This is new.
We have to ask the question, what happens when they push us into a completely digital cash-less society? We know that when we went from barter to "money" our societies saw a massive increase in activity. We know that when we went to a "currency backed by money" system the entire world experienced the biggest growth spurt the planet had ever seen. But in the last 40 years we've gone to a "currency backed by nothing" system and we're seeing that groan and creak because of the abuses of printing too much of it. Not to mention the downsides of theft, extortion, illegal activity, etc. It is a failure, and they know it. The system will be revamped.
So consider this. At "some" point, even if the so-called currency of the future is indeed backed by some percentage of gold, there will be NO PAPER MONEY. Every transaction will be a card swipe, a smart phone pass, etc.
So there it is folks. At some point in our not too distant future, the idea of "cash" will be tossed in the garbage bin. Everything you do will be recorded digitally. Now we have to try and figure out just how that affects us. For some the effects will be quite large. Consider the drug dealer. He plies his trade in the dark and uses cash. Well if there's no cash in our system, how does he get paid? Consider all the "under the table" folks. You know, the guy that cuts ten of his neighbors lawns each weekend for 30 bucks cash. How does he get paid now? If it is all digital, there's a trail, a completely unbroken trail. He can't hide that from the IRS any more.
Consider anything you buy. Did you think you'd be slick when you were cheating on your spouse by buying him/her gifts with cash? No longer, now the wife would be able to find those "charges". In fact, if Uncle Sam is dead set on knowing every single thing about you, then a cash less society is his orgasmic fantasy. But what I want to know is this... what is the resultant effect on the economy? Will sales rise because you can swipe faster than you can trade cash and wait for change? Will jobs be created because it will no longer benefit someone to hire someone else "under the table", or will the percentage of poor explode because those folks will not be utilized anymore?
As much as a cash society is flush with the ability for abuse, how does one measure the "good" that hidden transactions represent? I have found no logical way to explore it to be honest with you. But I know that there have been times in my life where I've "lent" some money to someone, where it bailed them out of a tough jam, and it would have been disaster if they had to let others know they "needed" the funding.
There's been other times where just handing my table waitress an extra tip, brought us service above and beyond the normal. What is the ancillary effect of moving cash around that isn't attached to a digital string? How does one give their kids an allowance, or pay the neighbor kid for shoveling your driveway? How many businesses were built in America by someone with dogged determination starting out by going door to door selling cookies or shoveling snow? Would all those kids be forever pushed out of the budding entrepreneurial pool?
How big is the Bureaucracy going to be that tries to watch over all that digital snow? Who's the Government troll that will dissect all the digital payments you make? Is not Government intervention in our lives at a level we already see as abusive? Then we have the security side of it all. What happens when there's the "glitch" like we've seen lately, where you log in and your bank account shows "0" in it? You can't even buy a gallon of milk until you get that account fixed, how long does that take? Then consider the implications for "them" to completely stop you in your tracks. If cash is not accepted for any good or service, the Government can absolutely crush you simply by shutting off your "digital account". Think about it deeply folks because the implications for abuse boggle the mind.
I have thought a lot about this over the past few months as I see more and more digital card readers pop up in every area of our lives. You see commercials for readers you pop onto your phone so you can swipe cards wherever you are. You saw the beginning of it when years ago McDonalds put card readers in their outlets. Now it's Starbucks and virtually every convenience store. The march towards a completely digital world is marching forward and picking up steam. Just 40 years ago the concept would have been science fiction. Today it is not only reality, it is roaring forward.
From where I sit, it is my opinion that right now all of this digital money is being seen as a benefit. That is because it "supplements" the status quo, it "adds" to your ability to do business. But, once the hammer falls and it is "law", I see a much different picture. I see disruptions in so many areas, that the "net net" of it all is very negative. It is the ultimate "big brother" eye in the sky. With that in mind, it "has" to stifle economic activity.
Let me leave you with this thought. Imagine a major drug dealer in say Miami. While selling drugs is clearly illegal, and many people are hurt by it (the drug user, turf wars, etc.) the fact is that the millions made by the dealer and his gang is spent. Homes are built, cars are sold, pools installed, travel booked, etc. Despite the creation of the cash being illegal, the resultant spending of the cash is "good" for the economy. A digital society could put the dealer out of business, which is good. But the businesses that would have benefitted from that dealer spending his illegal gains is hurt, which is bad.
Which one will end up having more societal impact? It is a troubling question.
Governments are broke and they're on a wild hunt for tax income and tracing money is their game. Digital money makes it easy. Just this week we see news that the IRS is allowed to read personal emails. We saw news stating that they inspect Facebook and twitter for hints that you might have more money than you're stating. Digital dollars is their golden goose and thus it will be implemented. We all have to understand that, and decide what it means to each of us. I can't tell you the day, but there's no doubt in my mind that it will happen in the next ten years. A long time you say? Nope, just the blink of an eye, ask my great grand mom, she'll tell you.
There's absolutely no doubt that at some point in the future, they are going to abandon the idea of "cash" and all transactions will be done with a swipe.
Consider "money" for a while. It has been around in one form or another for thousands of years. When the first coinage was used to "buy" goods instead of using the barter system, there's no doubt that several things happened. One is that it became stupendously easier to get what you wanted or needed. But by association it creates a massive boom in "business". For instance let us suppose you were the farmer and you had hundreds of cows and steer. Well you might want to get a pair of pants or some boots. But the shoemaker didn't want a milk cow or a steer. So you guys couldn't do a lot of business and your feet still hurt. Once the concept of using coins (lets just say currency) really took hold, you could buy your pants and boots from the Shoe maker, and the house builder could "buy" your cows and meats. The velocity of business increased exponentially. Expanding that, all forms of increasing "good" took place.
People could "buy" books and pay tuition to schools. They could easily pay for musicians to play for their parties, etc. Education exploded, the arts became more widely accepted.
Money was a darned good thing.
Then of course there came a time when they figured out that carrying gold around was a bit of a pain, and the first concepts of "currency based on gold" was issued. This was the first good stabs at "currency". The idea being you'd use a slip of paper with a number on it as your vehicle to buy something. The paper "note" would correspond to an amount of gold you could exchange the note for if you wished. While many credit the Europeans for coming up with this and to some extent they were very important as to it's ultimate adoption, the Chinese began the practice 2000 years ago.
The Song Dynasty in China was the first to issue paper money, called "jiaozi", around the 10th century AD. Although the notes were valued at a certain exchange rate for gold, silver, or silk, conversion was never allowed in practice. Then, the successive Yuan Dynasty tried again and was the first dynasty in China to use paper currency as the predominant circulating medium. The founder of the Yuan Dynasty, Kublai Khan, issued paper money known as Chao in his reign. The original notes during the Yuan Dynasty were restricted in both area and duration as in the Song Dynasty. (notice that even today most will call the Chinese currency the "yuan" instead of the Renminbi which is its actual official name).
Of course you all know that here in the states President Nixon closed the "gold window" which basically severed our currency from any backing what so ever. We became "fiat" meaning that our currency was only backed by Uncle Sam saying it has value. It couldn't be exchanged at the banks for gold any more. Since that time, we've seen all manner of things happen, just as they have in the past. They PRINTED ever more gobs of the stuff. Well guess what? We've seen all that before. All of it.
The Romans printed money, the Greeks, the Argentineans, the Germans, you name it. All through history they have printed more money than they had "metal" (gold or silver) to back it and it always ended badly. It has only been in the past 45 years that we've embarked on what amounts to a completely "fiat" global situation. No one's money is backed by anything any more. This is new.
We have to ask the question, what happens when they push us into a completely digital cash-less society? We know that when we went from barter to "money" our societies saw a massive increase in activity. We know that when we went to a "currency backed by money" system the entire world experienced the biggest growth spurt the planet had ever seen. But in the last 40 years we've gone to a "currency backed by nothing" system and we're seeing that groan and creak because of the abuses of printing too much of it. Not to mention the downsides of theft, extortion, illegal activity, etc. It is a failure, and they know it. The system will be revamped.
So consider this. At "some" point, even if the so-called currency of the future is indeed backed by some percentage of gold, there will be NO PAPER MONEY. Every transaction will be a card swipe, a smart phone pass, etc.
So there it is folks. At some point in our not too distant future, the idea of "cash" will be tossed in the garbage bin. Everything you do will be recorded digitally. Now we have to try and figure out just how that affects us. For some the effects will be quite large. Consider the drug dealer. He plies his trade in the dark and uses cash. Well if there's no cash in our system, how does he get paid? Consider all the "under the table" folks. You know, the guy that cuts ten of his neighbors lawns each weekend for 30 bucks cash. How does he get paid now? If it is all digital, there's a trail, a completely unbroken trail. He can't hide that from the IRS any more.
Consider anything you buy. Did you think you'd be slick when you were cheating on your spouse by buying him/her gifts with cash? No longer, now the wife would be able to find those "charges". In fact, if Uncle Sam is dead set on knowing every single thing about you, then a cash less society is his orgasmic fantasy. But what I want to know is this... what is the resultant effect on the economy? Will sales rise because you can swipe faster than you can trade cash and wait for change? Will jobs be created because it will no longer benefit someone to hire someone else "under the table", or will the percentage of poor explode because those folks will not be utilized anymore?
As much as a cash society is flush with the ability for abuse, how does one measure the "good" that hidden transactions represent? I have found no logical way to explore it to be honest with you. But I know that there have been times in my life where I've "lent" some money to someone, where it bailed them out of a tough jam, and it would have been disaster if they had to let others know they "needed" the funding.
There's been other times where just handing my table waitress an extra tip, brought us service above and beyond the normal. What is the ancillary effect of moving cash around that isn't attached to a digital string? How does one give their kids an allowance, or pay the neighbor kid for shoveling your driveway? How many businesses were built in America by someone with dogged determination starting out by going door to door selling cookies or shoveling snow? Would all those kids be forever pushed out of the budding entrepreneurial pool?
How big is the Bureaucracy going to be that tries to watch over all that digital snow? Who's the Government troll that will dissect all the digital payments you make? Is not Government intervention in our lives at a level we already see as abusive? Then we have the security side of it all. What happens when there's the "glitch" like we've seen lately, where you log in and your bank account shows "0" in it? You can't even buy a gallon of milk until you get that account fixed, how long does that take? Then consider the implications for "them" to completely stop you in your tracks. If cash is not accepted for any good or service, the Government can absolutely crush you simply by shutting off your "digital account". Think about it deeply folks because the implications for abuse boggle the mind.
I have thought a lot about this over the past few months as I see more and more digital card readers pop up in every area of our lives. You see commercials for readers you pop onto your phone so you can swipe cards wherever you are. You saw the beginning of it when years ago McDonalds put card readers in their outlets. Now it's Starbucks and virtually every convenience store. The march towards a completely digital world is marching forward and picking up steam. Just 40 years ago the concept would have been science fiction. Today it is not only reality, it is roaring forward.
From where I sit, it is my opinion that right now all of this digital money is being seen as a benefit. That is because it "supplements" the status quo, it "adds" to your ability to do business. But, once the hammer falls and it is "law", I see a much different picture. I see disruptions in so many areas, that the "net net" of it all is very negative. It is the ultimate "big brother" eye in the sky. With that in mind, it "has" to stifle economic activity.
Let me leave you with this thought. Imagine a major drug dealer in say Miami. While selling drugs is clearly illegal, and many people are hurt by it (the drug user, turf wars, etc.) the fact is that the millions made by the dealer and his gang is spent. Homes are built, cars are sold, pools installed, travel booked, etc. Despite the creation of the cash being illegal, the resultant spending of the cash is "good" for the economy. A digital society could put the dealer out of business, which is good. But the businesses that would have benefitted from that dealer spending his illegal gains is hurt, which is bad.
Which one will end up having more societal impact? It is a troubling question.
Governments are broke and they're on a wild hunt for tax income and tracing money is their game. Digital money makes it easy. Just this week we see news that the IRS is allowed to read personal emails. We saw news stating that they inspect Facebook and twitter for hints that you might have more money than you're stating. Digital dollars is their golden goose and thus it will be implemented. We all have to understand that, and decide what it means to each of us. I can't tell you the day, but there's no doubt in my mind that it will happen in the next ten years. A long time you say? Nope, just the blink of an eye, ask my great grand mom, she'll tell you.
Saturday, March 16, 2013
Gold and Silver News
While there is continuing debate in the Survival-Prepper circles about the value of having silver and gold bullion, and silver coins for melt or barter value on hand for when the dollar or economic collapse occurs,....and it is apearing more and more likely that it is a question of "when" and not "if",........it is still a good idea, even if you do not subscribe to having precious metals, to keep on top of what is occuring in the gold and silver market.
American Eagle gold bullion coin sales jump, by Kerry Hall, March 9, 2013 on www.mining.com
The US Mint sold 80,500 ounces of American Eagle gold bullion coins during February compared to 21,000 ounces the previous year in that month for a 283% increase, reports Mineweb.
In the first two months of 2013, sales were up 56% compared to the same period last year.
Overall, total gold coin sales for January and February were 430,500 ounces. During the same months last year, sales were 124,500 ounces.
January 2013 made the record book at sixth place with gold coin sales of 124,500 ounces.
For American Eagle silver bullion coins, reported sales were 3,368,500 ounces during the second month of the year. That's 126% more than the same month last year.
For January and February, silver coin sales were 10,866,500 ounces — up 43% from 2012 when 7,597,000 ounces were sold.
Will we see a silver breakout in 2013? from the Gold Report, March 13, 2013 on www.mining.com
Silver has been trading sideways so far in 2013, but what will the rest of the year bring? Will 2013 be the year silver prices break out or crash and burn?
What is a sustainable silver price for mining companies and where will the metal come from to supply the next generation of industrial and investment demand? Most important, how can investors make money off this volatile sector?
These were the burning questions The Gold Report took to analysts, money managers and heads of silver mining companies. The answers may surprise you.
One of the world's biggest silver investors, Eric Sprott, pointed to the availability ratio between silver and gold for why the metal price could jump from $30/ounce ($30/oz) to as high as $200/oz as he predicted in a recent radio interview.
He quotes statistics that show once the industrial use of silver and gold is subtracted from the production and recycling new supply calculations, three times more silver is available for purchase each year than gold. However sales of gold and silver at the U.S. Mint, through exchange-traded funds (ETFs) and Sprott's own Physical Trust, show that investors are buying many multiples more silver than gold and have been for years.
Sprott firmly believes that outsized demand in such a relatively small market ($9 trillion for gold and $150 million for silver) will result in price inflation. "We are surprised that the price of silver has remained at such a depressed level compared to gold. Historically, the price ratio between gold and silver has been 16:1. Today the ratio is 55:1, so what are the numbers telling us? We believe this is one of those times when smart investors will be well rewarded if they follow the money."
American Eagle gold bullion coin sales jump, by Kerry Hall, March 9, 2013 on www.mining.com
The US Mint sold 80,500 ounces of American Eagle gold bullion coins during February compared to 21,000 ounces the previous year in that month for a 283% increase, reports Mineweb.
In the first two months of 2013, sales were up 56% compared to the same period last year.
Overall, total gold coin sales for January and February were 430,500 ounces. During the same months last year, sales were 124,500 ounces.
January 2013 made the record book at sixth place with gold coin sales of 124,500 ounces.
For American Eagle silver bullion coins, reported sales were 3,368,500 ounces during the second month of the year. That's 126% more than the same month last year.
For January and February, silver coin sales were 10,866,500 ounces — up 43% from 2012 when 7,597,000 ounces were sold.
Will we see a silver breakout in 2013? from the Gold Report, March 13, 2013 on www.mining.com
Silver has been trading sideways so far in 2013, but what will the rest of the year bring? Will 2013 be the year silver prices break out or crash and burn?
What is a sustainable silver price for mining companies and where will the metal come from to supply the next generation of industrial and investment demand? Most important, how can investors make money off this volatile sector?
These were the burning questions The Gold Report took to analysts, money managers and heads of silver mining companies. The answers may surprise you.
One of the world's biggest silver investors, Eric Sprott, pointed to the availability ratio between silver and gold for why the metal price could jump from $30/ounce ($30/oz) to as high as $200/oz as he predicted in a recent radio interview.
He quotes statistics that show once the industrial use of silver and gold is subtracted from the production and recycling new supply calculations, three times more silver is available for purchase each year than gold. However sales of gold and silver at the U.S. Mint, through exchange-traded funds (ETFs) and Sprott's own Physical Trust, show that investors are buying many multiples more silver than gold and have been for years.
Sprott firmly believes that outsized demand in such a relatively small market ($9 trillion for gold and $150 million for silver) will result in price inflation. "We are surprised that the price of silver has remained at such a depressed level compared to gold. Historically, the price ratio between gold and silver has been 16:1. Today the ratio is 55:1, so what are the numbers telling us? We believe this is one of those times when smart investors will be well rewarded if they follow the money."
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