Discussion in 'Economics' started by Lobster, Dec 11, 2003.

  1. There used to be a refreshing and informative thread "Physical Gold" started by praetorian2. Unfortunately, I am not 100% sure of the details, since the thread vanished without a trace. I have been doing some thinking as to who or what could motivate the responsible party to erase such a thread, and I really don't know, to be honest, I don't even care. But

    1. The topic of planning for the dollar's downfall has begun to interest me more and more, and

    2. I always like to experiment, so let's try and see how long this thread survives. Maybe that way we can even get a clue as to who is censoring this kind of information and why.

    Now, the question I am currently trying to resolve is which gold coins would be most suitable for a scenario where even the majority of Americans will realize the dollar is not a trustworthy currency. If an egg costs $1,000,000,000 in the morning and $2,400,000,000 in the evening, even the average joe will find a better use for his paper than to carry it around in the hope that it might not be worthless the next day. Now, somebody said on the forbidden thread that Krugerrands are the most recognized coins. However, I do not think American gold eagles would be too bad a choice either, plus whenever a certain kind of gold coin is in any way preferred by the US government, we can be almost sure it will be the eagle, not the springbock. This fact could be worth a small premium, don't you think?

    The next, and probably more important, question is what denominations to have. When you think about it, a decent meal should be worth about 1/10 ounce of gold, no more. Therefore, it might be preferable to buy the little coins rather than the 1 oz ones. Think about it, If you want some potatoes from a farmer and you tell him you only have a 1 oz gold coin, he will likely grin at you and take your coin in exchange for a few pounds of food. If, on the other hand, you go to the farm with a 1/10 oz coin and ask the farmer how much it will get you, I believe you might just get a little more for your money. From that perspective, paying a few bucks more now might prove to be a good investment.

    Does anyone have historical information about this kind of situation, for example, were there coin dealers who would give you say .95 oz in small coins in exchange for a 1 oz coin? Or is that not a realistic rate?

    Any comments are welcome, but I would like this thread to be about physically small, highly valuable items that are likely to replace the dead presidents' portraits once the world loses confidence in them. In other words, alternative currencies as insurance against TEOTWAWKI or simply as an inflation hedge.
  2. pspr


    You should live so long!!

    Anyway, invest in 18K or 24K jewelry. That way you can wear it until doomsday comes. And get a gram scale so you can weigh it in case you want to cut it into smaller pieces.

    But, guns and ammo will be worth more than gold in the event you describe.

    Oh, and get a gas mask and some other survival gear, too. You won't be able to spend all that gold you bot if you are dead. :D

    Personally, I did a lot of reading when I was much younger and expected there was a decent chance something really bad was going to happen in the late 90's. It didn't. Maybe it won't happen in my lifetime or maybe it will. Either way, you can ruin your life spending too much time worrying about it and/or preparing for it.
  3. maxpi


    There was a guy named Howard Ruff that published books and a newsletter on this subject decades ago, I recall that he was talking about a variety of gold coins, bullets, hidden food stores, etc. There may be others with newer more relevant information.

    Personally I'm not tying up any capital in this kind of stuff at this time but it is an interesting thing to think about. If things collapse and you can liquidate everything early and survive and wind up with "cash" in the aftermath then the world is at your doorstep looking for a buyer. I had relatives that did just that and they amassed wealth in farmland and rentals and businesses and were retired at a very young age. The Rothschildes did that after the French revolution.

    I just see the economy as a big trade, sometimes it is best to borrow and invest the $, sometimes it is best to be in cash waiting for the bottom. Most people are not set up to handle the change when it occurs because it takes a lot of planning and thinking and it is hard to call the top anyhow.

  4. Regarding the guns and ammo theory, it is true that America is probably the one country in the world where you might need weapons most, but why are so many people so sure that a fast devaluation of the dollar will go hand-in-hand with civil war or "unrest" or whatever you might call it? Isn't it imaginable that the police and military keep working just fine, even Walmart keeps up its operations, only instead of cash they will accept gold and silver? Most people still won't have much "cash" sitting around at home, so it still won't pay for hoodlums to try and rob them any more than they are doing it now.

    What I just described is probably just as unrealistic as everyone shooting around like crazy, but the point I was trying to make is financial collapse does not necessarily equal the disintegration of law and order. And actually, the disintegration of law does not necessarily mean disintegration of order. If worse comes to worst, let's say there is no federal government and we have the wild west scenario, why would that mean guns and ammo would be worth so much more? What was is like in the actual wild west? Was the price of a gun expressed in ounces of gold significantly more or less than today?
  5. I agree. However, you can also turn it into a hobby. For example, there are many radio amateurs, who enjoy experimenting with their equipment and sharing thoughts with other amateurs, they actually call it a hobby, although the real purpose of it all is of course to provide emergency communication.

    Also, since you thought something bad was going to happen in the 90s and it didn't, doesn't your trading instinct tell you that every time you expect something and it doesn't happen, you are getting closer and closer to it actually happening, which will of course be the case when you stop expecting it? I found this observation (in trading) to be especially valid for longer timeframes.
  6. Only the paranoid survive!!

    paranoid people make great traders..
  7. ...if doomsday comes, if you have the guns you can take the gold. Just be sure you have enough beer and chips put by for nourishment while hunting for it.
  8. Why not move this to chit chat and call it : "How would you prepare for a total financial collapse ?"

    Andy Grove wrote a book called "Only the paranoid survive." He did quite well at Intel.
  9. maxpi


    I think that Howard Ruff (the only expert I ever heard from on this) was saying that the bullets would be for hunting basically, he thought people would be concerned with supplying food for their family. I don't recall a lot about civil unrest although there would almost have to be some, pretty hard to hunt for food in the inner city.

    There are emergency food supplies like you would not believe. Religious organizations, the Red Cross, the Military, other Government agencies, etc. all have food supplies. I was told by a guy that did a lot of work for the Red Cross and other volunteer agencies that if my area was without electricity/gasoline etc. for a few days that a huge transport plane would drop food that would last for weeks. That would give people a chance to make some plans to become supplied on their own and for the leadership to figure out how to get things revived.
  10. agpilot


    I think it was Country singer Tom T. Hall that had a good answer to this problem. His song suggested: Life is having Faster horses, taking more money, older whiskey and younger women. All the rest of life is BS.
    I often think he just may have hit it right on.
    #10     Dec 13, 2003