To a prepper, does it really matter how high silver climbs?

[Cabin Fever]

I'm wondering - to a prepper - does it really matter how high the price of silver or other PM climbs? We bought our silver for security reasons, not as an investment. By security, I mean our silver was purchased for the sole purpose to be used in case of TEOTWAWKI or a SHTF situation, in other words, when paper money is worthless.

I view our silver purchase as analogous to buying fire extinguishers. If the price of fire extinguishers are high today, I am not going to wait until there is a price drop before I buy some. I want the protection - the security - they offer now, tomorrow may be too late. Nor am I going to sell our fire extinguishers - that we bought for $20 - just because the current price of extinguishers is $50.

So, let the price of silver climb to $100 or even $1000, we are still not going to sell ours. Likewise, if silver drops to $10, we are not going to feel like it was foolish for buying it at $30. Like our guns, ammo, food stores, seeds, and other supplies, our silver is serving a purpose, we don't plan on using the silver until necessary; nor, do we plan to unload it if the price gets high. It was not purchased as an investment.

What about you?

[Txrider]

IMO precious metals should be a long term investment to hedge against inflation, basically siphon off a % of income into them for a long term hedge against inflation or any other issue that investment in company stocks or funds can't do.

So it really shouldn't matter for either a prepper or a non prepper how high it climbs really.. That should only matter to short term investors, folks hopping in to make a buck. And if the economy heats up a bit and the fed stop printing money a whole lot can jump out and drop the price of silver a lot, but that should not matter to a long term investor.

Kinda like all the folk who took such a beating selling out all their mutual funds, 401k's etc. when the market tanked back in '08... instead of waiting a bit for it to come back up. For long term investments like that you have to expect some highs and lows over the years and not panic.

People call the stock market a casino.. If you approach it that way you'll get burned just like the casinos get you. The stock market is for buying stock in good solid companies that give you a return on your investment over the long term, not a get rich quick lottery..

[PhilJohnson]

While it may be a good investment I question whether silver would be a good thing to have in a hard crash SHTF situation. In a hyper-inflationary situation where there is still somewhat of a functioning government and banking industry I could see silver being a very good thing to have. For folks that don't have a lot of cash I think stockpiling steel and copper would be a very good inflation hedge.

[Ernie]

If it climbs high enough I might divest myself of some to buy more land or certain other supplies I need, but ultimately I like silver as a trading mechanism post-fall and wouldn't want to get rid of too much.

Still, I have other things to trade and once Forerunner and I get our moonshine still going we'll be set for life.

[AngieM2]

Still, I have other things to trade and once Forerunner and I get our moonshine still going we'll be set for life.

Ah, going for "the remedy", strictly for medicinal purposes - I'm sure

[bee]

What Ernie said(about silver not stills!!). If I had it and it got high enough there are prep items I can't buy now but might sell silver to obtain..oh like a greenhouse or more/better fencing and I do want good quaility dairy goats......potbelly meatpigs and a tillapia tank...*sigh* an Icelandic riding horse!!!*...urmmmmm "go silver go!!!!

[TnAndy]

I initially bought silver for that reason.....a money of last resort. And I will always keep a fair portion ( especially my 90% coins ) for that.

But the more I came to understand silver, the market for it, the industrial needs and how little is actually available, I have come to believe there is a very good chance silver will outperform lots of other investment classes.

The market for silver is so tiny compared to the market for even a stock like Apple, for example, it's quite possible for a few hedge or pension funds to move into silver and cause a runup in price into the hundreds of dollars per ounce range. The industrial requirement for silver is so critical, that a 3-5 fold increase from here is NOT going to affect the price of most industrial uses.

Take a cell phone, for example, that uses maybe 1/20 of a ounce in it....at current price, that is 2 bucks worth of silver.....at 200 buck silver, that's 10 dollars worth of silver in a 200-300 buck cell phone. Are they going to quit making phones because their costs went up 8 dollars ?? Nope....they will simply pass it on to the buyer of the phone......inflation.

Same for many, many, many uses of silver.

Industry will drive the price, followed closely by speculators that understand that industry HAS TO HAVE IT. There just is no acceptable substitute for silver use that isn't already much higher in price ( like palladium or gold )...and NO substitute in some cases, due to the unique chemical/physical properties of silver.

THIS is why the world has used up most of the 40-45 billion ounces of silver ever mined in the history of mankind....GONE....SCATTERED TO THE FAR CORNERS OF THE EARTH and ECONOMICALLY UNRECOVERABLE.......whereas most of the gold ever mined, about 5.5 billion ounces, is still around in coin, bullion or jewelry form.

If people ever REALLY get a clue how rare silver is compared to gold, you'll see signs out there "We buy old photos" ! or "We pay gold for silver"......ahahahaaaaaa

What I think is coming is a gradual run up in silver price that you have been seeing over the last several years, until it hits SOME magic tipping point ( and no, I don't know what that is....but my guess is somewhere between 50 and 100 ) at which the world actually takes notice, and THEN it will be "Katy, bar the door" as speculators really kick in.

Prices will double and triple in short order. THAT will truly be a speculative bubble, I think, and a time to consider moving out of some of your silver and into something else IF you need that something else. Otherwise, you're going to see it spike into the low/mid hundreds, and then watch it come back down to probably 100-200 and then start to keep pace with inflation again.

In any case, silver has a LONG way to run over the next few years, assuming the world doesn't fall apart. And if it does, well, we're back to "money of last resort" again. I can't for the life of me see how having some silver at this time can be a bad position to be in, again, assuming you have a good handle on other prep areas.

[NamasteMama]

Silver is going up due to inflation. With the value of the dollar dropping like a hot rock, you bet I am going to transfer my money. Of course we are totally broke right now, so this is in theory.

[TnAndy]

Originally Posted by NamasteMama

Silver is going up due to inflation.

Not really.

Silver went up 80+% last year, and is up about 30% this year so far.

As bad as inflation is ( running about 15%/yr according to John Williams at Shadow Stats using the formula the govt used to use ), silver has far and away outpaced it.

The price of silver has been suppressed for many years as the behest of the Silver Users Association, to supply them with a cheap resource. Massive selling of paper silver into the market held the price down, and that is now slipping away, and the true market price of silver is about to be discovered.

I think that will somewhere in the 80-120 dollar range ( based on today's dollar ), but as I said above, will likely way overshoot it in a speculative spike for a short while....then it will settle back to reality, meet market demand, and keep pace with inflation at that point just like most other commodities.

Disclosure: My crystal ball fogged over years ago.....due your own research and come to your own conclusions.

[Tracy Rimmer]

For me, it's just a gauge by which to track, roughly, how many people might be "getting it". The price rises with demand, so more demand probably means a few more people clueing in. I realize that not ALL of the demand is likely to be driven by this, but certainly some of it.

So long as I have other, renewable, resources at my disposal to get the things I need my silver will be retained for all the reasons Cabin Fever outlines.

[ryanthomas]

I have about half of my precious metals reserved for just such post-SHTF trading. The other half I consider an investment/inflation hedge. I am a little more willing to sell gold than silver. TnAndy explained a lot of the way I think about silver, better than I ever could. The only caveat is, post-SHTF, industrial demand for silver will probably drop. But that isn't really a problem either, since whatever you're holding is still money, IF you have it in physical silver and not certificates or stocks. I also stockpile steel in several forms, since I think it may someday be a "precious metal," if not to the population at large, at least to me. It will certainly always hold some value that currency will not.

[secretcreek]

Originally Posted by bee

What Ernie said(about silver not stills!!). If I had it and it got high enough there are prep items I can't buy now but might sell silver to obtain..oh like a greenhouse or more/better fencing and I do want good quaility dairy goats......potbelly meatpigs and a tillapia tank...*sigh* an Icelandic riding horse!!!*...urmmmmm "go silver go!!!!

If you want to purchase quality dairy does, check out the wonderful genetics=high quality=will hold up longer Saanen does at: www.kickadeehill.com This WV ( near Charlstn) diarygoat breeder has held offices in the ADGA, and Saanen clubs. She's raised goats for a very very long time...and wins when she shows them. Again, these are not auction "who knows what" goats...these are the cream of the crop-years of perfecting big milk producing Saanens. * I only met her once, but I send people in her direction all the time as I know she raises top quality does. A friend bought a nice, big wether from her and trained him for WV mountian S&R.

-scrt crk

[bee]

thanks..but I had nubians and this time am going smaller..milking nigerians(someday as silver is back below 41/oz and falling....)

[Brokeneck]

I'm fairly good friends with the local coin dealer, He sells and buys alot of silver and gold. When it hit 40 that was aparently a couple of fairly large investors magic number to BUY! He sold 70K to one and 100K to another. Dont know why they waited to buy until 40? Any ideas on that?
Brokeneck

[Explorer]

You could always play the gold/silver ration. Sell one when things get out of balance and buy the other. I like tenth ounce gold bullion coins even though they are a little more expensive as they should be easier to spend if the SHTF . Currently they are at about a 1:5 ratio.

[Wisconsin Ann]

Now see....you all look at silver as an investment, or something to save to use as "cash" if there's a huge crash. Me...I use it. I build jewelry and utensils with it. I plate items with it. At the moment I can get double or triple the base cost of .999 silver if I make it into a simple bezel or just draw it into wire.

so....While I will always keep some "just in case", I'll keep using mine. It's a little like rotating your other items. You use up what it getting old, and buy new. With the metals, as long as I can still buy it for a reasonable amount, I'll rotate and make money to buy more land or machines while I still can. At the same time, you buy the amount of silver that you've used, thus keeping your stock at the same level.

Another thought....if someone has silver (or gold) stored as a prep item, and they find a good piece of land...well, makes PERFECT sense to me to sell that metal and buy the land. There is absolutely NO sense in hoarding the silver at $1,000 a ozt, when you need land, or house, or paying off bills instead of losing your house.

[Cabin Fever]

Originally Posted by Wisconsin Ann

Another thought....if someone has silver (or gold) stored as a prep item, and they find a good piece of land...well, makes PERFECT sense to me to sell that metal and buy the land. There is absolutely NO sense in hoarding the silver at $1,000 a ozt, when you need land, or house, or paying off bills instead of losing your house.

Good thought, but I would imagine that if silver hit $1000/oz, land would hit $10,000/acre at the same time.

Which brings another thought to mind. Seems like a lot of folks may believe that they will have more purchasing power with silver when it hits some outrangeously high value (compared to the dollar). How many believe that if you can fill your vehicle's gas tank with a silver dollar today, when silver reaches $1000/oz, you will be able to fill your gas tank 20-times with the same silver dollar? I guess I don't. I'm of the mind that IF silver reaches $1000/oz, I'll still only be able to fill my gas tank once with a silver dollar.

[ryanthomas]

Land is already 10 grand an acre here! But I think your idea is valid for gold, but less so for silver, since silver is a more useful metal. Its price is based more on demand, not just on inflation. I think gold has kept a little ahead of inflation, while silver has at times increased quite a bit beyond inflation. At least that's how I understand it. I may be wrong.

[TnAndy]

Guess I don't quite get your point, CF.

Takes 120 "dollars" now to fill my pickup.

Assuming silver ever went to 1,000/oz. and gas was still the same as today ( unlikely, but say it happened ) a silver dollar ( about 3/4oz ) would buy 6.25 tanks for me. A silver dime ( 0.7oz ) would be very close to one tank.

And if gas is still priced in FRN dollars, then trade the silver dollar for paper money, and buy your gas.

In 1964, gas was 25 cents/gallon.....a silver dollar, or 4 quarters or 10 dimes would buy 4 gallons.

Today a dollar face in silver is right at 29 paper dollars. At 4 paper dollars per gallon, you get little over 7 gallons for the exact same dollar in silver that bought 4 gallons in 1964.

Either silver has gone up in value, or oil has gone done, relative to each other.