Saturday, August 11, 2018

Precious Metals and the Prepper

Silver and gold are often discussed within prepper and survivalist circles. Here are my thoughts on the subject: 

Silver and gold are very unlikely to help you survive in the midst of a disaster of any sort. Bottled water, food, and warm, dry clothes, shoes, & blankets will likely be much more important, and a “currency” in much greater demand, in the midst of any disaster. Look at the immediate aftermath of Hurricane Katrina – people were desperate for clean water and dry clothes, not gold or silver.

However, silver and gold may make a good hedge against inflation in a mostly “business as usual” atmosphere. Also, in the long-term aftermath of a major disaster that includes an economic and political collapse, gold and silver will likely prove to be extremely important as a currency, but only as society begins to reorganize and looks to stores of wealth other than devalued and worthless currencies, and collapsed credit markets.

Another thought: In the aftermath of an economic collapse, it will be virtually impossible to enforce any certificates or other paperwork that say you own gold or silver that is being held for you by a broker, financial intuition, or anyone else. Any gold or silver you own that is not in your physical possession will most likely not be recovered by you if a complete economic and political collapse occurs. If you believe an economic collapse is likely, take physical possession of your gold and silver before the collapse occurs. Naturally, keep your gold and silver in a safe and secure place, and make sure as few people as possible know you have it.

So, how much should you invest in precious metals? It depends on your situation. First, make sure your other basics are covered - including paying off your consumer debt and setting aside an emergency fund. Once that is done, many financial experts recommend folks keep about 10% of their money in precious metals. I personally would recommend at least 20%, given the state of world affairs. Again, this is only after you have covered your other financial and preparedness basics. Decide for yourself what is best for you. 

I hope this article has given you some "food for thought" on this topic. You may also be interested in my article, Prepper's Guide to Junk Silver, from 2014. It includes a lot of technical information on the topic. 
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