With the national debt climbing faster than a Russian supersonic rocket and inflation remaining elevated, I am considering buying gold or silver or both as a hedge for devaluing of our currency. Is this even a good idea or are there better stores of value that could be used as barter if needed?

I have been off and on buying gold and silver over the last 20 to 30 years. I like having some but there is no way I would ever have over 5% of my savings in precious metals.

They are not the hedge as they use to be aga8nst inflation.

You can Google graphs of gold price vs time and inflation vs time and see the lack of correlation,

I have friends with over 60% of thier savings in precious metals and thier savings in the last several years have not grown very much.

Gold and silver had a nice dip this week, premiums are low, and even constitutional is reasonably priced. We may get to 50T before this nut cracks but as the saying goes, when the shoeshine guy mentions silver and gold, you're too late. It's good to have some real money on hand, not to get rich, but not to be poor. I nibbled on 1/10 oz random gold eagle this time for $229. They took my fake federal notes in exchange which is astonishing.

Catchy commercials aside, look at the long term growth rate of precious metals. Here’s a 20 year comparison, I think it’s a wider gap going longer.

https://www.statista.com/stati...rcent%20respectively.


I wouldn’t bet the farm on gold or precious metals, some is ok.

I think it prudent to hold some precious metals. Gold and silver have had value to humans for thousands of years. The same cannot be said for fiat. That said, I consider PM's in the same vein as that folded up $100 bill in my wallet. It's there in case I need it, but I'm not looking to make any money on it. Merely a store of wealth or a savings account not that different from an emergency fund. If it's a choice of paying down debt or buying gold, service the debt first.

quote:

"when the shoeshine guy mentions"

Thanks for the reminder, SigStory.

I think that was attributed to Joe Kennedy who apparently dodged a bullet in the Black Tuesday Stock market crash of 1929. He was a stock broker (and other commodities too) at the time.

The story was that he went into work in a large downtown office building and had his shoes polished by a shoeshine guy in the lobby. This happened just before the crash. While he was getting serviced, the guy was discussing stock tips he had heard and giving him advice about what to buy and sell.
He claimed after he was done getting the shine, he went to his office and sold any stocks he had.

In those days, most regular working folks didn't invest in the stock market, that was an upper class investment back then requiring more sophisticated knowledge.

A bit of wisdom there nonetheless.

A similar version of the story here:

https://www.pitzlfinancial.com/blog/ode-shoeshine-boy

I bought my gold and silver quite a while ago and haven't purchase anything recently. I bought it about 30% for diversification and 70% for if I would need for bartering in the future (same as most of my ammo stash). Thankfully I haven't had to use and it has appreciated a good bit but I wouldn't buy strictly for an investment.

My Dad had bought both silver and gold some years ago (20-30?). His concern was a total collapse of the paper dollar. Silver would be handy for smaller transactions where a gold coin couldn’t be broken into a smaller amount. He didn’t live to see such a crash, but I like his logic.

Variety in currency isn't a bad idea. It's just that I don't think there is enough in private hands to make an "after the collapse" economy viable for any length of time. I could be wrong.

Gold seems to always be worth about as much as you pay for it when inflation etc. gets factored in. Silver has a tad more volatility, but it's hardly like almost any stock you can think of in that regard.

As for me, I keep some as a hedge for my loved ones when I'm gone. It's enough to put me to rest however they see fit, and maybe get them by until my other assets clear probate if necessary. The fact that Uncle Sugar isn't involved doesn't suck either.

Imho, gold and silver are a good choice for economic apocalypse such as the federal government renouncing the national debt, or hyperinflating us out of debt.

For the zombie apocalypse, I think some amount of physical silver might be helpful, but in a true grid-down teotwawki situation you would be better off prepping with barter items like 22lr ammo, small bottles of booze, cigarettes, small packets of edible energy (e.g. small candy bars), etc.

We own a moderate amount of silver and little bit of gold.

Physical metals that you hold in your hand are expensive. It is not for making a profit, it is for the catastrophic scenarios imo. The premiums can be quite high, so when you buy you may pay 10% - 20% or even more above the spot price. Then when you sell you only get spot. So you are going to have a hard time making profit with coins and bars.

Paper metals are much better priced but since you don't have it in your hand there is risk. There are some physical metals funds where they have 100% of the value in actual physical metals in their own vault. PSLV and PHYS are an example of this kind of silver and gold fund. These are good for what I would call regular citizen investment goals. You can use them to diversify your portfolio while providing some hedge against crisis.

Some funds, like SLV and GLD, are far less than 100% backed by the metals. For trading purposes to make a profit in the short term, they can work. But, in a crisis you may not get your money back. Like a bank that only holds a small percentage of cash, not everyone can get their money back if they all try to withdraw it.

I believe that the silver spot price is very manipulated, and it is currently quite undervalued. If you look at a price chart you will see regular peaks and valleys. If you draw some trend lines across those peaks and valleys you could come up with some buy and sell price points. But to me this shows how the big banks are using SLV to soak the unwary investor by moving in and out of SLV.

It is hard to see how to make a profit using silver or gold in a way that is similar to investing in regular stocks. For me it is a hedge against the dollar melting down, and for that purpose there aren't many other choices.

May sound a little strange , but I have been investing in LEAD and lead alloys along with alloying metals such as antimony, tin, and arsenic.
I cast bullets as a hedge against inflation.

Yup, in an uncertain economy, it makes sense to invest in 'Precious Metals'...Copper, Brass & Lead, as well as Ordinance Steel and other exotic precious metal alloys!

This message has been edited. Last edited by: nhracecraft,

As an investment, gold and silver are highly speculative. You could get lucky, or not. You’re certainly better off with your money in a stock market index fund.

There is nothing that could happen to the U.S. economy that would cause a stock market crash without a recovery that would leave the dollar with any meaningful value. In that event gold and silver will be useful for making jewelry. You’ll be much better off with guns and ammo.

I am just finishing reading the apocalyptic trilogy starting with “One Second After” which I will offer up in a Karma in the next week or so.
Even though the books are a work of fiction there is enough reality in it to make one think about what “I would do” in that situation.

The most important items that we sought after were …. Guns and bullets, specifically AR-15’s, hunting rifles, and .22 cal. Nobody gave a chit about their gold or silver bars… just sayin’.

quote:

Originally posted by Fly-Sig:
Imho, gold and silver are a good choice for economic apocalypse such as the federal government renouncing the national debt, or hyperinflating us out of debt.

Pretty much the sole reason why we invested in gold and silver coins 15 years ago, purely as a hedge against a financial disaster in the U.S. Plus, a means to retain part of our wealth if such a disaster destroys the dollar, since the history of gold as a means of trade and currency goes back thousands of years. And of course it still is a source of wealth for countries, most of them stockpiling gold in their reserves, so why not us?

quote:

Originally posted by smlsig:
The most important items that we sought after were …. Guns and bullets, specifically AR-15’s, hunting rifles, and .22 cal. Nobody gave a chit about their gold or silver bars… just sayin’.

And why not place importance on BOTH guns & ammo and precious metals as well? It doesn't have to be "either/or"

The Central Banks have vaults full of gold. That barbaric relic must be good for something.

Dumbass Trudeau sold ALL (most) of Canada's gold a few years ago.

https://capforcanada.com/burie...d-industry-to-china/

Ottawa sells off almost all its gold reserves, leaving just 77 ounces — or less

https://www.cbc.ca/news/busine...a-reserves-1.3475818

And they continue to add to their holdings.. pay attention to what they do, not what they say about PMs..

quote:

Originally posted by wcb6092:
The Central Banks have vaults full of gold. That barbaric relic must be good for something.

Dumbass Trudeau sold ALL (most) of Canada's gold a few years ago.

https://capforcanada.com/burie...d-industry-to-china/

Ottawa sells off almost all its gold reserves, leaving just 77 ounces — or less

https://www.cbc.ca/news/busine...a-reserves-1.3475818

quote:

Originally posted by smlsig:


Nobody gave a chit about their gold or silver bars… just sayin’.

They did in the Going Home series. Just sayin’.

I’m looking for an article I read not long ago saying Texas and Oklahoma and a few other states are trying to pass laws to make gold and silver legal tender in those states. I’ll link it if I find it.

ETA: OK SB862 passed in 2014 and was signed into law.

In anyone is a member of Costco here, they sell Eagles, Buffalo's, Maples and other bars regularly now..

Today they had Eagles and Buffalo.. and even silver Eagles too..

I bought some physical silver back in 2013 or 2014. The same discussions about the debt was happening back then. It's been a terrible investment. It's basically traded sideways for over 10 years.