Gold and Its Supposed "Store of Value"

Yep.....you nailed it there Old Hat.

Stocks, bonds, paper/digital dollars work great, right up until the day they don't.

And unless you have inside knowledge of when that day is, and can escape, you'll be left like countless millions in history, with a pile of broken promises, and paper consigned to the dust heap of history. There has never been a time in recorded history that gold and silver were worthless.

The trick is to move some, or most, of your earnings and paper profits into real wealth before they go "poof" (which, over time, they all do).

Real wealth being land, shelter, food/food producing means, (tractor, etc), tools, your own sources of energy, water, etc, and finally, precious metals.

Yes, and IMO things are going to go POOF! for a lot of people very soon. The record levels of the stock market are certainly not an indicator of the overall health of the economy. The U.S. stock market is waaayyy overvalued right now, because that is the only convenient domestic place where you can put your money that will keep up with the rate at which the dollar is being devalued through quantitative easing.

What seems like a good investment right now, can go Poof! overnight if those assets are not tangible.

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'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.

Friedrich August von Hayek

Just like money or stocks,gold and silver, are only valuable to the holder. If I can not eat it or provide shelter or safety with it,it is worthless. If you can not find that willing buyer of your metal at your time of need, I would say it is worthless to you.

That was Jd Belanger, the founder of Countryside magazine and poster here on the original board many years ago.

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I'd argue that unless a person/people are totally self sufficient, making or growing everything they'll ever need, there will always be a need for a method of exchange. Bartering will only take you so far. If you have a hog, but need a plow, if the guy with the extra plow doesn't need your hog you're out of luck. If he needs chicks instead, he can take your silver to the person with chicks for exchange. The chick person can then buy your hog.

When the dollar is gone the value of PM will equate to the values they've had through millennium. If an ounce of silver would buy 2 chickens 2000 years ago, it will again.

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Let us suppose that you are correct, that no one wants your gold or silver because they can't eat it. Let us suppose that economic disaster lasts for several years. When things start to recover, you may even be dead by then but your children will have your gold and silver, now when the economy recovers, you or they will be able to sell it for the new currency at that time and be able to get a good start in the new economy. One doesn't buy precious metals before they purchased what they think they would need to survive an economic down turn, but any extra wealth would be stored in a precious metal even if it is for your children. I would like to have extra wealth but I still need to purchase things I think I'll need. Once that is accomplished then I plan on putting anything extra into some sort of precious metal.

What you are describing is an issue with liquidity not value. Just because an asset doesn't have a willing local buyer at any given time, it doesn't make it worthless...it just makes it difficult to liquidate at that moment of time.

Gold and silver will never be worth zero. Money and stocks CAN be worth zero.

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'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.

Friedrich August von Hayek

There are many things only valuable to the holder. Personally, I have no use for 50 cal BMG ammo, dies, etc, because I don't own a 50calBMG type weapon. I could make a big long list of things that hold no value to me, and that fit the category of "unless you find a willing buyer".

But the concept of MONEY is a valuable one. Barter is clunky, don't care what anyone says. It works, but it's clunky. How many .22 shells is a chicken worth ? How do I save my crop of watermelons for trade in January ? That kind of thing. It's WHY the concept of money came about.

And now that humans have come up with it, I kinda doubt it it's going away. The rates of exchange for different currencies and items will ALWAYS be in flux...there is no constant.

And finally, you'll notice I put a list of REAL wealth in my post, beginning with LAND, and moving on thru many items I think we can all agree on that have real value. But there is also such a thing as money for the here and now. Land is fairly non-liquid. While it can be valuable, it doesn't do you much good as a medium of exchange. How many chickens is an acre worth....and do I really NEED that many chickens ?

I have never recommended a person put all their savings in precious metals. I have always recommended they get first things first.....that being a paid off piece of property they can raise food on...then the tools to raise food...water source....good shelter...so on.....but at some point, you BETTER have some REAL MONEY stuck aside....or just like all those folks in times past that lost their place to a little piddly amount of property tax, (or whatever), BECAUSE THEY HAD NO MONEY, you might find yourself homeless.

And by REAL MONEY, I mean money a banker or govt can't destroy the value of just like they have been doing for a 100 years. In 1915, a gold ounce coin was $20, just like the paper $20. Today the gold one ounce coin is $1200 paper dollars. SEE WHAT THEY DID ? The gold did NOT go up....the paper got crappier.

Precious metals may have some intrinsic value, say as bangles to decorate your mate. I doubt it will always have anything close to the value it has now.

If the economy goes south we will have to have some way to pay the property taxes. If the gooberment is collecting taxes they have to be using some form of currency. You will have to sell something you own to get the currency to pay the taxes. That something could be PM or any tangible asset. The value of PM won't hold up as well as the value of nails or a tractor or anything useful. I would rather have an asset that can be used for something than PM.

If the entire world economy goes in the pooper, we will be back to a barter system. I doubt you could trade PM for food or anything that could be used to make food. Again, the value of PM will be severely depressed compared to what it is now.

We are in a bubble right now regarding PM. A bunch of hysterical people have bid the price up way beyond what it should be. I'm with the guy that stores his wealth in screws and nails and buttons.

I am talking about the bulk of stored resources not total. I am not against storing ''some'' of your excess as precious metals, but I would never want to have to rely totally on it. If you need fuel or food to survive the day, it makes no difference if you can find willing buyers or traders of your gold next week. For a lot of people gold and silver make them feel secure. The problem is you are secure on average over a long period, but not on a daily bases. Long term trends and values are not very edible or nutritious!

It was not JD. This poster lived in a suburban location and talked about storing materials in the attic and crawlspace of his home. I believe he was from the east coast are and not from Wisconsin.

Good luck with paying your taxes with screws and buttons
Lots of us are over loaded with screws and buttons so trading to one of us with a corroborator for a F20 Farmall could be rough

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I thought the dollar was gaining value...

[QUOTE=Nimrod;7392480If the entire world economy goes in the pooper, we will be back to a barter system. I doubt you could trade PM for food or anything that could be used to make food. Again, the value of PM will be severely depressed compared to what it is now.

We are in a bubble right now regarding PM. A bunch of hysterical people have bid the price up way beyond what it should be. I'm with the guy that stores his wealth in screws and nails and buttons.[/QUOTE]

You're probably correct if you're talking about the first few months of an economic meltdown, but way off if you're referring to a time when society has returned to somewhat civil. There will be people who find they overstocked beans, or corn meal who find they need cooking oil. If you need beans or corn meal but no excess cooking oil, you'll wish you had something to trade that was portable for them to buy what they need.

The "bubble" you mention is in reality the dollar. PMs have been suppressed for a few years now to keep the dollar strong against other currencies. Just like the stock market, there's no justification for their current fiat values other than behind the scenes manipulation by the central banks, including the Fed.

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"The Big Load Washtub"

It is, relative to other stinkier currencies. People want out of things like the Euro, thinking US dollars are safer, that the FED is somehow less destructive than their central bank. Wishful thinking......

What Gravytrain means is the stock market is now the ONLY game if you want to keep up with inflation. Traditional savings methods return nearly nothing, and below zero, if you factor inflation into the equation.

Some countries in Europe are now at posted below zero interest rates (who would have thought it possible ? )....charging depositors to keep money in their banks. THAT is how desperate they are to get money out there and buying things. Google it and see how many are already on that band wagon.....then figure out your plan when it comes here.

Will you spend any excess you have, or stick it in the mattress/freezer/etc ?

I think it's a sign of the end of things are fairly close at hand for banks to go to negative rate (and actually admit it by telling you upfront)

A easy test peanut butter last year was $2.50 for 14 oz jar but today it is $2.50 for a 12 oz jar . Did the value of your dollar go up or is it just better peanut butter TPTB are lieing like a rug and expect up to swallow it .


You got to know their definition of stronger dollar and what they are comparing it to ,so it is just at the top of the heap at present .So just ask yourself what the heap is made of .
Vietnamese Dong - (33,976 VND : £1.00)
http://www.johnmason.com/2014/11/str...-in-the-world/

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Like Andy said, only in comparison to other currencies. The buying power of the dollar is plummeting. The sole purpose of money is as a stable measure of value that facilitates the exchange of goods and investment. When the government creates more of that currency out of thin air (QE), the real value of that currency is degraded.

If you put $10,000 in the bank 5 years ago, the real value of that money is now about $7900. If you invested that same amount of money into the market with a conservative fund and gained 5 or 6% you would retain the VALUE of that $10,000 or maybe gained a bit.

Agreed...this is not going to end well. And when it happens, it will happen so quickly that you will not be able to cash out in time to be prepared for it...unless you do it before the house of cards tumbles. Some Euro banks have already started seizing the deposits of their customers on the basis that those banks needed those funds! A law was recently passed that gave U.S. banks a similar authority to do the same thing. I'm not trying to be dramatic. It is not a question of IF...it is a question of how soon, and how bad.

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'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.

Friedrich August von Hayek

The problem with this and similar "bullets and beans" theory is that you cannot pay your property taxes in bullets and beans. Its fairly easy to cash your gold in for it's fiat value.

So what good is holding land ( even paid off ) and machinery to work that land if they come and kick you out because you couldnt pay your taxes because you lost your job and the economy collapsed? The government still wants its money in fiat.

Here's the scenario, inflation or deflation it doesnt matter; The economy goes belly up, your savings are either inflated away or confiscated in a 'bail in'. Your place of employment folds up and you're out of a job. Cash might help you for a while but when the dollar starts to lose its value prices will go up, including the price of your taxes ( as teachers, police, and other government workers will demand commensurate compensation ). The great thing about gold is it will likely go up in proportion to the dollar's decline. And, since gold is in your possession its harder to confiscate then, say, your bank account.

I like farm land, equipment, nails, bullets and beans but I like gold too because gold will help you keep those other goods.

And consider that the entire world has been in a currency war for the past 8 years, essentially a "race to the bottom" trying to out print each other and drive their own currencies lower. This massive tidal wave of printed up money, zero interest rates, negative interest rates, and they are STILL reporting a global slowdown.

Central banks have no where left to go, the pedal is through the floor boards ( NEGATIVE INTEREST RATES!! ) and the economy is still grinding to a halt. And with financial collapse, can war be far behind? Scary stuff.

Who gets to force the taxman to take your gold for taxes?? Who determines the exchange rate? If you are converting to inflated currency you could sell your ''beans'' to hungry people for the same currency. You will have zero control over the worth of your gold to anyone other than yourself.