shopping for gold.

[coppertales]

I went shopping for some gold this weekend and got a big surprise, there isn't any.  All the gold and silver places I went to did not have any gold, with the exception of a few 1/10th oz coins.  I asked when they expect to get any and was told, "when someone sells us some".  And, no-one is selling.  I had to settle for some silver.

I know you can buy paper gold but I want the cold hard coins in my hot little hands.  You can't use paper to trade with when TSHTF....Besides, I can use the silver to kill vampires.....chris3

[Silver Bullet]

Which brings up the question, what are other items of trading value when TSHTF ?

Things on my list are bars of soap, .22 ammo, cheap toilet paper.

Soap I wouldn't have thought of, but I heard a survivor of bad times during a war, or maybe the Depression, talk about how soap was good for trade.

I've bought up some cheap soap and TP, and I now have enough .22 to outlast this administration.

[alex_trebek]

On a somewhat related note, is there anyone out there who thinks this gold rush is a bubble? Or does it mean that the TEOTWAWKI is near (purposefully being facetious)?

I am not an economics guru, I have an understanding or supply and demand. Are people short selling, like oil last year, or is it something else?

I am thinking of buying commodities as an investment, but am leaning towards Pt, Ag. I think this gold rush is just another bubble that has popped up.  What I don't know is what percentage of the gold price is devaluation of currency, and which is short term supply shortage.

Any have any ideas? Only good ones, 

[BridgeRunner]

To respond to Silver Bullet's question, in a shtf situation, I think compact nutrition, like GU or Clif bars would be really valuable for both use and trade. 

[makattak]

Which brings up the question, what are other items of trading value when TSHTF ?

Things on my list are bars of soap, .22 ammo, cheap toilet paper.

Soap I wouldn't have thought of, but I heard a survivor of bad times during a war, or maybe the Depression, talk about how soap was good for trade.

I've bought up some cheap soap and TP, and I now have enough .22 to outlast this administration.

One living IN TSHTF disagrees with that idea...

The barter items thing is also pretty strange. I don’t see how it could possibly be a smart idea to buy goods to sell or trade after a crisis, surely not in the quantities suggested by some people. Beats me, are they going to set up a shop in their garages and sell everything? Would you buy food an other supplies from a guy that sells it with no possible way of verifying the conditions under which the food was kept? How much of a profit could you possibly make , comparing to having saved that same amount of money in gold, for example?

I don’t understand it and I don’t know of anyone that made a profit by doing this. Yet, people stock up on TP and many other cheap, easily obtainable items thinking that it will be “worth it’s weight in gold” after the crisis. Newsflash: if it’s cheap and easy to produce, it will keep being that way AFTER tshtf.

http://ferfal.blogspot.com/2008/10/mistakes-survivalists-make.html

[FTA84]

is there anyone out there who thinks this gold rush is a bubble?

I do.  Anytime item X hits "new highs" and is advertised on Fox news every thirty seconds, someone more in the know is looking to unload item X before the bottom falls out.

Buy low, sell high.  Buying now is buying high.

Edited to add:  Though it may be a better investment than holding on to cash during the great monetary base experiment of 2009

[makattak]

I do.  Anytime item X hits "new highs" and is advertised on Fox news every thirty seconds, someone more in the know is looking to unload item X before the bottom falls out.

Buy low, sell high.  Buying now is buying high.

Yep, I think FTA is right about the gold market right now. Rather overpriced based on today's conditions and indications for the future.

HOWEVER (like any good economist, I must have a caveat), if something more happens to collapse the economy, this price could go still higher.

[Jamisjockey]

I think its a bubble, but not a huge one.  It'll deflate down a little at some point.  Gut feeling based without fact.

Two types of buyers right now I bet.  Firtly, panic buyers who watch too much Beck.  I suspect most of them will keep their gold for awhile, which will help keep the cost up.
Speculators looking to make some money.  When the price gets up again, alot of them will sell.  Price will come down some more, Beck will pan gold some more, more panic buyers will buy, price will go back up.

[Jamisjockey]

One living IN TSHTF disagrees with that idea...

http://ferfal.blogspot.com/2008/10/mistakes-survivalists-make.html

IMHO, if it goes south, we will see it go south like it has in Argentina.  Hyperinflation, maybe a currency change.  Obviously, buying and keeping gold in the long run is worth it in this scenerio, and having it in your grubby little hands is the best bet.  TP and .22lr will only get you so far. 

His observations on bugging out to some fortress in the woods are very keen.  White, wealthy ranchers in Africa have been targeted for decades in utterly horrific attacks.
Evacuating to the boonies makes sense if the end of all ends happens, and there is no civilization left. 

[Brad Johnson]

I think its a bubble, but not a huge one.  It'll deflate down a little at some point.  Gut feeling based without fact.

Actually, you're gut feeling is hand-in-hand with market history data.  Gold is high, and has been, for at least six months.  If history holds, and the market continues in it's current recovery mode, gold is likely to drop 20-40% within the next twelve to eighteen months.

Brad

[charby]

Actually, you're gut feeling is hand-in-hand with market history data.  Gold is high, and has been, for at least six months.  If history holds, and the market continues in it's current recovery mode, gold is likely to drop 20-40% within the next twelve to eighteen months.

Brad

Kind of what I was thinking, maybe up to 60-70% devalue so its back somewhere between $300-$400 an ounce.

I just feel this up price in gold over the last few years is one of those "there is a sucker born every minute" scams. A handful of people are getting very rich and a lot more are going to lose out when the price of gold plummets.

[Jamisjockey]

I'd actually really like to buy gold right now, with the intent of sitting on it a very, very long time.  Preferably to be buying every month regardless of the price, and accumulating both real gold and paper gold.

[alex_trebek]

IMHO, if it goes south, we will see it go south like it has in Argentina.  Hyperinflation, maybe a currency change.  Obviously, buying and keeping gold in the long run is worth it in this scenerio, and having it in your grubby little hands is the best bet.  TP and .22lr will only get you so far. 

His observations on bugging out to some fortress in the woods are very keen.  White, wealthy ranchers in Africa have been targeted for decades in utterly horrific attacks.
Evacuating to the boonies makes sense if the end of all ends happens, and there is no civilization left. 

Is buying gold bullion THAT great of an SHTF investment? Didn't the blog about the Argentina collapse essentially say that ALL gold was considered "junk" gold except by banks? At the bank one would exchange for worthless money anyway. Wouldn't people be better off buying lots of junk gold if they primarily concerned with SHTF scenarios?

Continuing down this line of reason, gold bullion/certs should be standard investments, so now is not the time buy.

[sanglant]

I'd actually really like to buy gold right now, with the intent of sitting on it a very, very long time.  Preferably to be buying every month regardless of the price, and accumulating both real gold and paper gold.

i know what you're thinking

you are going to cast your umm ahhh... in gold!!!!!

[Jamisjockey]

Is buying gold bullion THAT great of an SHTF investment? Didn't the blog about the Argentina collapse essentially say that ALL gold was considered "junk" gold except by banks? At the bank one would exchange for worthless money anyway. Wouldn't people be better off buying lots of junk gold if they primarily concerned with SHTF scenarios?

Continuing down this line of reason, gold bullion/certs should be standard investments, so now is not the time buy.

I hadn't seen anything about gold being junk in that blog post...is that in an another post?

I would expect most any currency to be backed by gold, it's always been the global standard.  Someone would have to be willing to convert gold into currency.

[alex_trebek]

I hadn't seen anything about gold being junk in that blog post...is that in an another post?

I would expect most any currency to be backed by gold, it's always been the global standard.  Someone would have to be willing to convert gold into currency.

sorry, typing from phone so I am trying to be concise. The Argentina post awhile back was not the one I read, but I think is the same person. The one I originally read was over at frugalsquirrels. It was quite lengthy, and reccommended investing both gold bullion (for exchange at banks) and junk gold (for dealing with merchants). What he claimed was that individuals would assume that ALL gold was junk, because they didn't want to get scammed.

What I am saying is it would suck to spend 1000 preinflation dollars on one ounce, just to get 1000 postinflation dollars worth of goods at the market.

Diversifying seems to best the best policy, like most things in life.

The advice given in the whole shabang should be followed even when things are doing excellent, IMO.

By definition (almost), doesn't a hyperinflation scenario mean that the gov can't back it's currency with gold since almost no one is on any kind of standard?  Isnt that what makes it possible?

[makattak]

I believe what ferfal was saying is that gold was not a means of exchange, except for small pieces like rings or necklaces. Those you could quickly pawn without losing much value.

Thus, he was saying not to tie your entire wealth up in gold as you will have no means of functioning day to day.

However, you will note he suggests gold is a good store of wealth. He encourages purchase of gold as well as real estate as a means of saving.

He suggests a diverse portfolio that includes hard physical assets that may not have much liquidity, but retain value well (and, in the case of property, may provide an income stream.)

So, to sum up: Gold is a good store of value in a time when currency is uncertain. Gold coins/bullion are not very useful for exchange. Small bits of gold may be useful for exchange/bribery.

So, don't buy gold thinking it's how you're going to survive DURING the crisis. Buy gold as a means of preserving your wealth.

(As an aside, I do not have any gold aside from what's on my wife's hand. AFTER we've purchased our condo, that is one of my plans to build up a decent store of gold as a hedge against inflation/crisis. I will also not be dumping my 401k into gold at any point in the foreseeable future.)

[Brad Johnson]

Just for consideration...

If the SHTF in a mega-world-meltdown way, which would be more valuable - a couple ounces of gold or or the equavalent value worth of food and ammo?

Brad

[HankB]

A couple of decades ago (back around 1980) when gold peaked in the neighborhood of $850, lots of people expected it to keep rising without interruption.

It didn't. In fact, the price dropped hundreds of dollars per ounce, and stayed there for a good long time.

It's only in the last year or two that they could have "broken even" or even made a profit on their investment . . . but if they sold now, they'd be getting paid in inflated dollars.

How many of those inflated dollars would they have if they'd invested in bonds, CDs, or something else for 27 or 28 years? Almost certainly, more than if they'd bought gold bullion.

I'll say that I DON'T KNOW how gold will behave in the near future . . . but I don't think the people selling it on TV or the radio know, either.

[makattak]

Just for consideration...

If the SHTF in a mega-world-meltdown way, which would be more valuable - a couple ounces of gold or or the equavalent value worth of food and ammo?

Brad

Yep. And, unless you expect the world to turn into a "Mad Max" or "Road Warrior" type situation, how long will that $2000 worth of food last?

Note, this is not an either/or situation. Once you have enough food to last during the crisis, why buy more food?

Some kind of society will emerge from the crisis. Once the society starts to "work" again (even a high crime, high corruption society), people will be able to purchase food and other goods.

Having 10 years worth of food that perishes in 5 is likely not a good strategy.

[Brad Johnson]

Might want to read that a little more carefully.  I said food AND ammo.  Food to keep you in the short term, ammo to keep you in food for the long term.  As for "buying" more food, in the scenario above there won't be a stable food source to buy from.  Also, you are presuming the gold will has some kind of value in a post-SHTF economy.  Gold has value in technology and as a bauble.  In a truly bad post-SHTF society, technology and vanity will take a back seat to survival.  Kinda hard to eat gold, or to buy anything with a lump of metal that may have no value because is possesses no intrinsic usefulness other than looking pretty.

Brad

[makattak]

Might want to read that a little more carefully.  I said food AND ammo.  Food to keep you in the short term, ammo to keep you in food for the long term.  As for "buying" more food, in the scenario above there won't be a stable food source to buy from.  Also, you are presuming the gold will has some kind of value in a post-SHTF economy.  Gold has value in technology and as a bauble.  In a truly bad post-SHTF society, technology and vanity will take a back seat to survival.  Kinda hard to eat gold, or to buy anything with a lump of metal that may have no value because is possesses no intrinsic usefulness other than looking pretty.

Brad

And, again, you expect society to turn into "Mad Max"?

The crisis will not last forever and some kind of society will return. Farmland will not disappear. Food will exist.

As for gold, I think you undervalue it slightly. There's a reason it became a medium of exchange in every society I've ever examined...

[Jamisjockey]

Just for consideration...

If the SHTF in a mega-world-meltdown way, which would be more valuable - a couple ounces of gold or or the equavalent value worth of food and ammo?

Brad

While ammo stores indefintely, food does not.  If one were properly prepared, you'd have enough stores to get through until you can get a proper crop up and running.  Learning to can and having some of the equipment stored would be an investment.  That would be a good way to go, IMHO, whether you lose your job or the entire world financial system collapses and all governments ceased to exist.  Being able to feed yourself for free in any situation would be ideal.
On that note, does anyone know how long plant seeds store for?

Really, the most realalistic meltdown is an Argentina style "reset" (or "transformation"), IMHO.  

[Brad Johnson]

Again, folks, go back and read the question.  It was a what-if, a thought experiment, not a supposition of things to come.

First (and i reiterate) I did not say food or ammo.  I said food AND ammo.  Food for short term, ammo to get food for long term.

Mak... yes, gold "became a medium of exchange in every society I've ever examined...", but only after the society established a standard of living that allowed for some level of vanity and the luxury of using non-essential goods as a means of exchange.  Again, kinda hard to eat gold, and kinda hard to use it to buy anything when all everyone else needs to do is eat, too.  In those cases, food, clothing, and shelter, or the means to acquire such, become the most valuable.  Only once those basic needs are met can the society afford to place a value on non-essential items. 

Oh, sure, people will try as it is human nature to to hoard things we think have value, especially in times of crises.  Unfortunately, reality will only allow a certain order to things, beginning with basic survival (i.e. food, clothing, shelter, and a way to get them).  Once that is satisfied the society can begin placing an inferred value on non-essential items as a means of barter.

Jamis... IIRC scientist have been able to successfuly germinate several-thousand-year-old seeds found in Egyptian tombs.  Vacuum sealed and kept in a cool place, I daresay most seed would be viable darn near indefinitely.

Brad

[makattak]

Mak... yes, gold "became a medium of exchange in every society I've ever examined...", but only after the society established a standard of living that allowed for vanity and the luxury of using non-essential good as a means of exchange.  Again, kinda hard to eat gold, and kinda hard to use it to buy anything when all everyone else needs to do is eat, too.  In those cases, food, clothing, and shelter, or the means to acquire such, become the most valuable.  Only once those basic needs are met can the society afford to place a value on non-essential items. 

Oh, sure, people will try as it is human nature to to hoard things we think have value, especially in times of crises.  Unfortunately, reality will only allow a certain order to things, beginning with basic survival (i.e. food, clothing, shelter, and a way to get them).  Once that is satisfied the society can begin placing an inferred value on non-essential items as a means of barter.

Correct. In a society where everyone is struggling to survive, anything not directly aiding survival has little value.

As I have said repeatedly, I seriously doubt such a situation would persist long. Society will not entirely collapse into a state of nature. Some individuals will retain wealth. (See Argentina). MANY will be destitute, but you are very unlikely to want to trade with them.

The gold is not a means of living during the crisis, it's a means of storing current wealth through a crisis. Banks will not disappear, neither will the wealthy. Don't simply focus on the collapse, think about "After the Collapse" (to steal from Ferfal.)