Posted on 10/22/2014 7:23:19 AM PDT by blam
Collectibles are worthless in a SHTF scenario. During deflationary times (should we ever see such a thing again), collectibles lose tremendous value. I doubt collectibles would be that valuable during a currency collapse either.
From a more practical standpoint, vintage cars are most valuable when they are sought after by those who have finally achieved financial success and wish to relive their youth, buying the models they used to have or wished they had had when they were young. After that generation passes away, then those models lose value, often lots of value, because now their market is to a much smaller group of die-hard collectors.
Diamonds of course are actually almost worthless due to a worldwide glut that is soaked up by De Beers in a massive effort to keep the supply limited and prices artificially high.
Guns and ammo are interesting, especially guns, because even in a worse case scenario, modern high quality firearms never lose their value and are quite liquid. I have a friend who treats a large part of his gun collection as basically a bank account to convert to cash whenever needed. He’s always on the lookout for good deals too. And of course, you always have the practical value of guns in various self-defense scenarios as well.
“Wine, firearms seem to be the only practical items among the 11 listed.”
Well aged Tennessee Whiskey like 12 year old George Dickel might fit into that list too. Plus this:
http://blog.cheaperthandirt.com/47-survival-alcohol/
I maintain that society would have to devolve a very long way indeed for money (true money like Gold and Silver) to lose its essential utility.
Unless events push society back to a literal stone age - a hunter-gatherer existence with no farming - then money will still be valuable.
Why is money important? Because it allows for the "concidence of wants" without which trade is impossible.
I invite the thread to join me in a thought experiment.
Let us imagine that the dollar has finally collapsed and that we live in a Mad Max dystopian nightmare.
In the center of this brave new world you run a chicken farm (appropriately defended by traps, barbed wire and kick-ass FReepers with sniper rifles).
This month you have costs - you need to hire a guy to mend the generator and a midwife to help with your daughter's pregnancy. How are you going to pay them?
They have what you want - but do you have what they want?
Unless you have some money there is no "coincidence of wants".
The generator guy and the midwife have no use for a hundred chickens! They need to replace their working materials (bearings, WD 40, medical supplies, etc) and upkeep their spiky Mad Max cars by trading with people who live a hundred miles away.
But if you have money then you can trade with them.
Continuing the example of a chicken farm - it's market day! There are a hundred customers lined up at the gates of your compound, They want what you have - but do they have what you want?
Fifty of them have wheelbarrows of devalued fiat currency and bad attitudes. You have no use whatever for their bundles of useless scrip.
Forty of them will offer some form of barter. They offer you alcohol, batteries, hunks of homemade cheese, their lithe nubile bodies, etc.
You are faced with the time and expense of evaluating forty different barter offers, many of which you will have absolutely no use for, or that your heavily-armed wife will veto.
And ten customers offer you money: Gold and Silver. These are your favorite customers: their real money fulfills the requirement for a coincidence of wants. You can take what they offer you, and use it to buy the services of the midwife, the engineer, etc.
In summary: trade relies on the coincidence of wants which in turn relies on money.
At the moment we can still use fiat currencies for trade, because fiat currency still (sort of) works like money. But we won't be doing that when we've passed into Zimbabwe or Wiemar republic mode.
Hope this was helpful.
“The value of Gold comes from its role as money, not from its industrial uses.”
Which country’s currency are you arguing is gold?
Rare stamps, small pieces of art, documents, memorabilia are good investments as long as there is no major collapse. As long as the US & global economy continues to produce an increasing number of wealthy people, these items will probably hold up over time because they become more difficult to obtain with time.
One of the key benefits to holding small items with large stores of value is that they can be relatively easy to take from place to place and across borders w/o attracting attention. This is definitely something to consider with civil forfeiture and closer screening of US citizens at the borders.
A customs or TSA agent will never know the wide differences in value between all the variations in condition and subtypes of early US stamps.
Certainly, I agree about the utility of money. However, gold has value PRECISELY because it has been traditionally accepted as money. It is not necessarily true that gold has any intrinsic value other than this fact. Consider, for instance, if you were dropped via plane onto a remote Pacific island populated by a tribe of potentially hostile islanders. Would you rather have a bag full of gold, which the islanders might never have seen before and would not know what to do with, or would you rather have a bag full of guns and farming tools which the islanders would find useful in their situation? I would think you’d have a better shot at making nice-nice with the natives in the latter case. My point was simply that gold is valuable only by convention of society, and not via any value actually intrinsic to the gold itself.
I knew a woman who tried to consider her collection an investment. It only became a tax write off to the children’s hospital when donated to the kids after she was in a nursing home.
The money value of gold arises from the same source as the money value of the currency in your pocket, namely that it is an accepted means of exchange. If gold is no longer acceptable generally as a means of exchange, it is (mostly. I do realize there are industrial uses) useless. Gold has no more intrinsic value than does US currency (or any other currency). Both are accepted as means of exchange. The only value of gold over currencies is that currencies derive their value from specific governments, whereas gold has traditionally served as a money independent of specific governments. However, if you were in a situation where gold was NOT traditionally used as such (see my example in a previous post regarding dealing with islanders living on a remote Pacific island, for example), gold would have no real value.
Short version: Gold has value because people and societies traditionally have regarded it as valuable, not because there is anything intrinsically valuable about gold.
As for the rest of us: no-one currently uses Gold as currency specie for transaction. This is because of Gresham's Law.
Gresham's Law
A monetary principle stating that 'bad money drives out good.' In currency valuation, Gresham's Law states that if a new coin ('bad money') is assigned the same face value as an older coin containing a higher amount of precious metal ('good money'), then the new coin will be used in circulation while the old coin will be hoarded and will disappear from circulation.
To adapt Gresham's Law (which was coined in a time when real money was used in trade) to our modern time: imagine that you are buying a car, or a house, or cinema tickets - and you have a choice of paying with either Gold or with paper currency that's hemorrhaging 7% value a year - which would you use?
For now you can still offload the paper currency instead of using real money. You can do this because Governments *absolutely rely* on offloading printed paper currency to meet their debts, and they therefore mandate that we do the same. They've been doing this so long that most of us have forgotten what real money is.
A time is coming when this confidence trick will no longer be possible. But until that day: who will part with Gold?
You’d be amazed at how well Lego holds up over time.
Gold is an accepted means of exchange because it has the properties of money.
It’s easy to transport and identify. It’s durable, easily divisible, fungible, hard to counterfeit and easy to store.
The only reasons why a primitive society wouldn’t be using Gold are because a) they simply have no access to Gold or b) they are simply too primitive to increase their wealth year-on-year.
After all: a society that has nothing to store has little need of money: money is a store of value.
The monetary attraction of gold entails: it is mined at a rate roughly on par with the increase in world total economic value, it can easily be purified to a verifiable quality, it does not corrode/break/leak/react/etc, value density is convenient (not too much/little value in a convenient coin/brick size), is fungible, is easily rendered into any suitable size, and has some (but not too many!) uses in industry & art. Most everyone values it about the same for what it is. Nothing else is so universally convenient for storing significant, but not enormous, value.
The value of gold for SHTF scenarios is preserving wealth thru the scenario, a way to “bury money” with little concern about converting it back to economic liquid forms once society recovers.
I have to leave the thread: someone from eight time zones away is about to ring me :0)
Bye for now!
“Why would they use Gold?”
By your own admission then GOLD IS NOT MONEY. Money is a circulating medium of exchange. Since there is no country with it in circulation that means it is not money. Gold is an ELEMENT! I understand fiat currency. I understand fractional reserve banking. But the tendency of some conservatives to put their trust in Gold (warned against in scripture BTW) just because silver or gold were once the designated basis for the currency is reactionary not logical. Gold is an ELEMENT! That is all. Anything more is just what I said “ownership stigma”, “just a big mental case”.
Your postapocalyptic town can agree to use chicken manure as the medium of exchange, i.e. money if you want. ANYTHING can be used as a medium of exchange, and ANYTHING can be exploited as a medium of exchange.
“The monetary attraction of gold entails: it is mined at a rate roughly on par with the increase in world total economic value”
That is farcical. Mining can be done at any rate which the economics of price vs mining costs dictate. Total god reserves are finite. Yet global population is growing logarithmically, and economical value is going up even faster because so much of the world’s population is still in economic backwater. When four billion Chinese and Indians all have the standard of living of America that will be a big bunch of wealth.
How should you store up your wealth?
If you have extra after you have done elaborate prepping. :-) then here are some suggestions
1. High quality hand tools, like a hand powered grain mill with belt option and spare parts. Be sure to keep all things stored where they will not rust. Water pumps, anything tool anyone wood need to accomplish anything. IT is even better if you can get a good deal on a slightly used one.
2. High quality commercial tools, and know how to use them. I remember a store of a guy finding and buying a pneumatic chisel from the early 1900’s, it had a lifetime guarantee. The company spent a little to repair it and it still works great nearly 100 years later. Again, rust free storage. Generally avoid things which technology will rapidly outdate if you are concerned about value beyond apocalyptic value.
3. Freeze dried vacuum packed medicinals, and other medical supplies, and know how to use them.
4. Personally I suggest a complete solar system with backup panels and backup components like inverter, charger, wires and batteries. Right now solar panels can be gotten for about one twentieth the cost they were prior to 10 years ago. Breakthroughs in fusion or such could devalue their resalability, but hey would still be usable by you. This also makes DC motors and tools more attractive. Preferably store all electronis in an emf shielded location, and underground if you can guarantee dryness.
5. I would also suggest a filabot and compatible 3D printer with backups or spare parts. The filabot will allow you to turn plastic trash into source filament for the 3D printer. And it can help you with ongoing parts. If you have a LOT of extra money also get a metal 3D printer and a CNC machine.
6. There is probably no amount of guns and ammo that would not be valuable. I would avoid the typical high priced collector weapons. in a SHTF scenario the collector value will be gone, only functional value will matter. Complete reloading supplies are good too.
7. If you regular prepping food storage does not have it, or you don’t want to fully food prep, get supplement prep. Freeze dried vacuum/nitrogen packed spirulina and beepollen are great all around supplements. Alone they could supply enough nutrition to keep you for a very long time.
Heck no! 600 guns would fit in a moving van very nicely. Don't ask me how I know that.
I've been thinking about it. Two very good things to have would be a private water supply and a greenhouse obscured from public view.
I follow everything you say, with just one question. I agree gold and silver will fill the role, but there's the danger of counterfeit. How does that farmer know how pure that gold is? That silver bar? That jewelry? That's why I'm thinking some current 1 oz silver bullion coins, easily identifiable, are best if the monetary system collapses.
Isn't one characteristic of anything to be used as money an agreed upon and easily verifiable value?
Ignorant question. He wasn't arguing that any country's currency is gold. Nonetheless, gold is currency.
It wouldn't be traded at all if it weren't. It has virtually no industrial value. People just value it. The definition of currency.
Goldbug ping.
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