The ongoing surge in gold and silver prices has a lot of people looking at precious metals as a way to preserve wealth and earn a return. Preppers like gold and silver for two good reasons. First – gold and silver love bad economic news. When times get tough, people flock to precious metals. If you’re prepping, you’re doing it because you think times are or will be tough. Second – the value is in the metal itself. Compare that to a paper dollar bill where the value is in what it represents, not in the paper itself. Silver or gold coins are valued for what they contain, the metal itself. You hold it in your hand. The comparison is the same as stocks (representing ownership of a company) and real estate (something you can touch).
Preppers favor silver more than gold for two other good reasons. First – it costs less. You can buy silver more easily than gold and build your stash over time. Spending a little money to have ounces of silver in your hand creates a faster sense of gratification than waiting months to save for just one ounce of gold. Second – it’s easier to use than gold. Silver is easier for bartering. Gold is difficult to divide as currency, hard to barter for an ounce of gold. You get many ounces of silver to one ounce of gold.
Silver also has more industrial uses than gold. It’s used in photography, jewelry, batteries, electronics and bearings. Emerging uses include medical applications, solar energy, food hygiene and water purification. Silver has been called “poor man’s gold,” but if you own a good pile of silver nowadays, that doesn’t sound so poor to me.
There are a few basic ways you can invest in silver:
- buy silver “stuff,” junk coins, mint coins, bars, and rounds
- buy a silver “certificate of ownership” for silver that is held by investors
- derivatives
- buy stocks in silver mining companies
The prepper will usually eliminate the last three, because they don’t put silver in-hand, silver’s best attribute. That leaves you deciding between which ways put the actual silver in your hand.
Silver stuff means anything containing silver; jewelry, flatware, old letter openers, anything silver. This approach can be a little complicated unless you know your stuff. Buying only sterling silver items (92.5% silver) is the safest. Sterling silver is usually stamped “SS” or “92.5″ or something similar. That leaves no question as to how much silver it contains. You simply weigh the item and take 92.5% of the weight. That’s how much silver you have. Buying silver stuff may hold interest for some, particularly if you see it as a hobby. There are some pretty, old items out there sold as “scrap silver.”
Junk silver is suggested by most preppers as being the best method. Junk silver refers to older coins that are made of anywhere from 35% to 92.5% silver. They’re called “junk” only because they hold no collector value. The value in the coin is in the silver itself. They’re plentiful and most people know what they’re worth.
Mint coins is the worst way to buy silver. You pay a premium for the collector’s value of the mint coin. Buy a mint silver coin because you want a mint silver coin, not because you want to store silver.
Silver rounds are one-ounce silver coins that are .999 fine, virtually all silver. They are cheaper than mint coins, because you don’t pay for any collector value. Rounds are attractive, affordable and easily carried. They are easy to buy, sell and count; the perfect money for a worst-case scenario.
Silver bars, like rounds, are a great way to buy silver. They come .999 fine. The bars come as small as a single gram (why?) to as large as 1,000 ounces. Bars are stamped with their weight and percent silver. They have a uniform size so it’s easy to store and handle them. They are recognized around the world making them easy to use as currency.
Hi Ho, Silver! Hi Ho, Survival Silver! I love it!
- Ranger Man
BTW, if you want to read more about the awesomeness of silver, I recommend these:
- Precious Metals Investing For Dummies
- Buy Gold and Silver Safely: The Only Book You Need to Learn How to Buy or Sell Gold and Silver
- Sterling Silver Flatware: Value & Identification Guide
If you just want to give me Amazon affiliate love, I recommend these:
- Buffalo Design 1 oz (.999) Fine Silver Round
- 1 Oz (.999) Fine Silver Bar – Eagle Design
- 10 oz Silver Bar .999 Fine
- use the Amazon search bar in the sidebar for whatever Amazon action you desire
The real trick of any investment is to pull the trigger when it’s time to sell & not hang onto any emotions associated with the purchase. Have a plan and stick to it regardless! Parallels combat, eh?
I’ve made a fair bit and the times I’ve lost was due to veering from my plan through either fear (the fear of not replacing it) or idiotic greed or the ultimate decline happens and the “deer in the headlights” syndrome takes over. Unfortunately (pardon the pun), my losses were significant and did hurt. What can I say, live and learn not to repeat the mistakes.
What happens, is you buy an investment (gold, silver, oil, real estate etc.) and hopefully it goes up. When it does, the emotions kick in and feed a greed sensory gland (ha, ha), excitement starts brewing and perspective & reason begins taking a backseat. The next part is crucial and what separates the millionaires from the serfs….
You reach the specified & desired (annualized) return and do not pull the sell trigger! You have then entered into the emotion state and decisioning becomes a difficult chore to manage. When the investment levels & starts to decline which most do, selling is very difficult because you are outside of your plan, perspective has been abated and most people spiral to a loss or a break even, if lucky.
Bottom line – research, plan, buy AND sell – then repeat!
PS
Precious metals are very fickle and require a constant finger on the economic pulse because they are primarily affected by rumor, innuendo & negative news – all of which can change quickly – in either direction.
Read “Silver Thursday” in the following link:
http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
Though extreme, the point is to illustrate the power of rumor with little regard to base fundamentals.
Over on ANOTHER survivalist website there’s a current craze going on to acquire nickles. The older kind made out of copper and nickle. The newer kind is made out of aluminum(?). Apparently the worth of the base metals in an older nickle is 7 cents in today’s market.
So folks are being encouraged to buy thousands of dollars worth of nickles. When I asked the webmaster WHY having nickles in that volume was a good idea, I got a good answer. He said that with the value of silver being so high, if someone were to conduct a transaction with someone who accepted coins as barer, that nickles would be more versatile. Even a silver dime is like 12x face value right now (could be more, didn’t look it up), irrelevant, anyway, to my point, which is:
1. Let’s say there was some kind of crash where we started conducting our personal transactions in metal based coinage. HOW MANY nickles would a family need to do their day to day business, and since your fellow travelers are also using nickles, wouldn’t that mean that you’d be taking in nickles as well as spending them?
2. People there are admitting to buying thousands of dollars worth of nickles from banks. Some admit to buying a couple thousand dollars worth a month.
3. It’s illegal to melt down US coinage for the base metals – so even IF the base metals turned into something truly valuable – where would you go to melt them down to get the value out of them?
I guess it seems to me that folks doing this are going a little “Y2K” about it. I have two kinds of silver, “junk” silver in all denominations – and silver rounds (some of which are divisible into quarter ounce segments). I have enough, to my mind, to conduct business with like minded people out there. Again, “business” means that I’ll be making money too, not just spending money – so IF (a mighty big “if”) the US economy crashes, and IF I can find somebody still producing things and IF I am producing something someone wants, then it might be possible to create a sub-economy. As it is the only people I see bartering in coins are the typical EBAY sellers of cheap goods, or those offering ‘services’. Haven’t found a farmer near me that does this, or any livestock operations, or any doctors/dentists etc. who do. In other words the ONLY people I perceive as unrealistically conceiving about a precious metals based economy are those who are currently hoarding silver and nickles who expect to be relative billionaires during a crash. I don’t perceive of any of them as having anything I want to purchase, and I think that I’ll only be doing business with people that I consider productive – not some moneylender type with a gigantic pile of precious metals that is supposed to turn them into some kind of bank.
Have I ranted enough?
I agree that some people seem to be going overboard buying tons of nickels. More rants!
Silver is on sale NOW !
Silver is in a Bull Market and will go much higher.
buy Silver coins!
not paper silver, paper is not actual silver. Silver coins you can hold in YOUR hand can’t be scammed from you.
My take on precious metals has always been as an insurance policy against uncertain times. Not as a great money make r although my investment in them has been profitable.
I think the my greatest profit will be in the security they provide in the event of Global finacial SHTF scenario. Protect .and grow acertain part of my wealth which allows me the freedom to adjust to whatever may come.
I wouldn;t put ownin g PM’s above any of my other preps such as food,water ,shelter, preotection After these things have been covered certainly a few coins or bars would be next on the List
I have a few coins, which have been passed down through my family for at least 10 generations… I don’t care how bad it gets they won’t be used for trade! My family is (for the most part, we are technically “mutts”) Swedish, it is customary for a bride to have a gold coin in one shoe and a silver coin in the other shoe, on her wedding day, these are given to her, gold by the father-in-law-to-be, and silver by the groom to symbolize that she will never have to “go without”. I have all the coins my grandfather gave me (his mothers, her mothers- mother, her mothers- mothers- mother… you get the picture, it comes out to 12 sets of coins), and I have the set which will be *hopefully* be given to a Mrs. ChefBear someday… If she can continue to put up with me!
More to the topic at hand, and less about Swedish customs… Sorry guys!
I have considered buying some silver, just to have on hand cause you never know when you might need an indisputable form of money “money”. I haven’t done much research into purchasing silver though, I (like I would assume most folks) always thought it would be WAY out of my budget to purchase anything bigger than the .999 silver custom-made bracelet I gave my girl for Christmas. Thanks RangerMan, it was pretty cool to check out those links at the end of the article. I had no idea that “the average Joe” could buy silver like that, and whats more at a somewhat reasonable price. One question though, as far as a “strict/intended monetary value”, how much are the 1oz rounds supposed to be worth? It’s obvious that it’s a coin, but I didn’t see a denomination note imprinted on it… Unless of course I am just blind, which after the day I’ve had, that’s certainly possible!!
Another thing I think is important to note, and I must apologize because it only somewhat relates to the topic at hand. PERSONALLY, I think that if we find ourselves in TEOTWAWKI, rather than a short-term SHTF situation, we will find that communities will start using a trade system similar to what would be found in a TRUE communist atmosphere (The USSR was not a TRUE communist country, because they had several “classes” of citizens). What I mean when I say that, is that in a TRUE communist society/economy is based on trade of goods and services, rather than by using money to purchase what you need. I think that those of us who have skills which are needed for things like plumbing, farming, alternative energy (let’s face it, we will still want our radio/TV if it’s possible), blacksmiths, tanners, butchers, bakers, doctors (of course) just to name a few, would make up the base of the new economic structure, and probably do better than most others trying to make a living in different ways. I also think that if we go through a TEOTWAWKI scenario that doesn’t involve the complete decimation of the human race, we will see a system which our great-grandparents would have been familiar with. I also think that the economic structure would be regional, rather than national/international. But again, this is just my opinion!
The 1 oz rounds aren’t “coins” at all, they just look like them. Think of them as 1 oz bars of silver, only stamped into circles … with a design …
The thing about PM’s, are the way their buying value stays the same. The “$” value is what changes. PM’s are not an “investment,” it’s more like a savings account.
The value of a silver dime converted to USD ($) still buys the same amount of goods.
When you sell it your only getting what the paper value is. Sure you get “more” money, but that money buys less.
Folks say buy junk silver, but have you tried to sell “junk” gold?
Is that $1000 (retail) diamond ring really only worth $100 at the pawn shop? (On a good day.) Try to sell 14k gold. And they won’t give you it’s true value, because of “meltdown fees.”
Junk Silver on the other hand has NO meltdown fees! Just its obvious value.
It’s (probably) too late to use our empty (inflated) money, to buy gold/silver. It’s much better to buy food/lead/brass/iron, while it’s still available/affordable.
How much gold/silver will you take for your last can of peaches?
Buying/storing nickles is silly! Sure it’s nickle, but what can you do with it besides plate metals with it?
And what about gemstones? Just pretty rocks… (“I’ll give you 3 aquamarines and 2 rubies for a gallon of gas!” &/or, “Got change for a .5ct diamond?”)
I agree with the comment that said the folks holding large PM’s might become bankers. At least the “money” they’ll lend/sell you will not be paper!
The main reason to store gold/silver is for paying taxes/extortion. Taxes will hurt even more when paid in PM’s perhaps enough to offer to pay in lead!
BTW, you can hire me for only 25c (Ag) an hour!
Yup, that could be the subject of another post – trying to actually SELL your silver. The key, I believe, is first to buy it at less than melt value, like a coin dealer.
I was looking at very small gold amounts. You can buy a gram ‘bar’ of .999 gold for $60 or so. Of course that is a huge premium over the current ounce price but at least it is small enough to barter with.
Update, 3/23/11
1 oz Silver up over $37
Buy physical Silver coins or bars and hold them.
CRASH JP MORGAN BUY SILVER
In reading the “other” replies, the following occurs to me…
Just wonderin’ but isn’t “pulling the trigger” on an investment EXACTLY what got us into this mess? Everybody wanting to make a percentage on the original investment, rather than a portion of the profits generated by a company?
It used to be true that IBM, Polaroid, etc… paid dividends to regular stockholders. Then at some point the “preferred stock” was invented and the only thing “common” stock got you was the right to sell it. At this point the big investment accounts, like large trust funds and retirement funds have bought up most of the long-term dividend paying stock that exists – and the only thing us common guys can get is common stock that pays NO dividends. Which pretty much means that like the housing market, you HAVE to sell it for more than you paid for it (mini pyramid mentality) in order to make a profit.
it’s almost like common stock was invented so that those people with small amounts of money to invest in something would literally hand it over to the big guys with NO promise of return.
Ick, I hate the stock markets – they are no longer how you grow a nation strong, they are how the rich transfer wealth to themselves and unless you’re on the “inside” you’re never going to make much.
I have a lot of respect for the Muslim way of doing banking. A lender CANNOT charge interest. As an investor (lender) you are entitled to a share of the profits. They don’t have derivatives (look it up, it’s essentially a bet – but dressed up as something acceptable). They don’t have hundreds of legal schemes meant to convince us to give our money to people we haven’t even met, with NO IDEA whether or not the company we’re investing in will actually make a profit, in fact, we are encouraged not to care if the company is viable.
Anybody remember the dot-com bubble? Companies that were internet based were bought and sold for months before they EVER put out any product or service. Some companies were worth 400 million on paper, and they hadn’t even set up operations yet.
20 somethings involved in those companies then went out and traded their shared in the company for other shared in other companies and without creating one drop of sweat, were millionaires almost literally overnight – and NOTHING ever got produced.
I think that when were at TEOTWAWKI the banker types are going to go hungry, because those of us who produce things will see them for what they are – a reincarnation of “Mr. Potter” from “It’s a Wonderful Life”. They’ll have a pile of gold, they’ll WANT whatever it is we produce, but have nothing of real value to trade for it. I mean, has anybody actually thought how someone will decide that 1lb of butter will be worth 1 silver dollar/quarter/dime?
Precious metals are a way of concentrating wealth, perhaps the FIRST way of doing so, without industrial processes to actually use precious metals they are worth no more than paper money, the only advantage to them is that inflation is flat because you can’t just print more silver or gold. With the concentration of money, comes the same old system of wealth that brought us here. So i think the banker types SHOULD go hungry, because their only plan after the crash is to take advantage of those of us with REAL tangibles, again, doing it by convincing us that something weighing 1/10th of an ounce, is worth both of our draft horses, or our entire year’s honey production. The concentration of wealth in this manner is only justifiable when you consider that it’s easier to haul a pound of gold to a distant city, than 1 ton of grain – this assumes a supply of things in the distant city that you want to buy.
Sharia banking, though, offers a much better idea. yeah, I know, muslims dont get EVERYTHING right – but I think they hit this one on the head. I think that Christian’s have forgotten an essential principles, remembering that Jesus tossed moneylenders from the temple, that there ARE biblical references to the charging of interest as immoral. It is currently illegal under the law for an Israelite to charge interest to another Israelite, but NOT to do so to a foreigner (which I consider equally immoral).
Usury USED to mean simply “interest” it’s been twisted just this century to mean “excessive interest”. Wikipedia has a good bit of reference to this:
http://en.wikipedia.org/wiki/Usury
It all comes around to HOW we use what we consider “money” when things collapse, or even currently.
me? I do loan money to friends, I even loan money to strangers – and for a long time I didn’t charge interest, and I didn’t know why… Now I know why I don’t, and I still don’t charge interest when asked for a loan. Either something is a good thing to do in and of itself, or it will increase the fortunes of those I lend to, thereby increasing MY fortune.
Argh, ranting again, aren’t I….
Nuf said though, gathering silver and gold with the idea of being “on top” if things collapse is something I find morally corrupt, what YOU do is subject to your own code, and I don’t hold others to mine.
About selling gold… I’ve though about that crappy deal for years! I had gold, and needed my plumbing repaired, fast! And asking around got me “offers” that were essentially the same, crappy.
Carat gold, 14k, etc… Isn’t the same as a “easy to move” coin. With a coin you pay the % up front when buying it… (N% over spot) and then sell it for spot.
But as the price of gold goes up, it becomes like a “hot potato” (with a $ grenade as the tater!) And no one wants to get stuck with a bad deal… So, the crappy buying prices… They too need to profit.
So a bracelet WILL NOT hold it’s value the way a coin or bar will.
I’ve been a (small time) jeweler and I know, the markup is huge! (It was a great gig for a while… When there was an economy!)
There’s talk that the value of gold is just like that of diamonds, and are being manipulated by the uber-riche.
After all, it’s a easy way to get gullible suckers to pay MORE for something that’s basically useless.
If you’ve paid a crazy amount for gold and get stuck with it, then you lose.
Suppose you paid $100 and a buyer will only give you $50? It’s a bad feeling… Just ask anyone that’s had to “hock” stuff!
Anything, is only worth what someone is willing to pay!
Great response.
If TSHTF then silver and gold can turn out to be very poor investments. You can’t eat it and you can’t shoot it to protect what you need to eat.
A non computer controlled diesel or gas powered vehicle that actually runs after a disaster on almost anything has great “right there value”.
What is worth more, a big family van or a diesel 6×6 gator when it comes to moving over areas where roads no longer exist and are under 2 feet of water, like Japan is right now.
If you are a store owner and the economy has collapsed, would you sell your last scraps of food for silver or a good .22 pistol with ammo?
Metals are a hedge against inflation, and yes, I think having a gold, silver, steel, and aluminum collection does not hurt. The thing is one ounce of silver today buys just about the same amount of food one ounce of silver did back in 1960. Back in 1960 you could buy a loaf of bread for $0.25 that weighed 160z. Now you have to pay $1.50 for the same pound of bread.
If I had $20K, I would make sure I had a garden, food stored, ammo, and guns to sell before I ditched it all into coins and metals. Metals only work with an economy in place, except if it is easy to melt like lead and you can actually make bullets, roof patches, etc. with it right in your backyard.
If TSHTF and everything collapses I think I rather have $30 of AA batteries then one ounce of silver.
Though I rather have one ounce of silver then $50 worth of stock in a company, right now.
Everyone seems to be a little hung up on TEOTWAWKI and naturally everyone has their ‘favorite scenario’ but to say that PM will be worthless is a bit of a jump. Now I totally agree that if the Gov came crashing to a halt TOMORROW then yes, PMs would probably do you little good. However, that is just about impossible and the LEST LIKELY thing that could happen. Not that the Gov couldnt crash in a day but PEOPLE wont believe it, the sheeple will still hold on to their beliefs. That is why so many pack spare cash in their BOBs! During the first week of a “Realistic” meltdown people will still be taking cash-will there be massive inflation? of course. cash will eventually give way to PMs and the sheeple will be taking gold and silver for what they have because they HONESTLY BELIEVE that the Gov will recover and when it does they will be better off/richer. And yes, eventually you guys will be right- people will start to understand that it is just pretty metal at which point we will be back to bartering goods and services strait up.
The issue here is *HOW LONG WILL THAT TAKE*?? Because if you think we will enter into a barter system within a week of “the collapse” you are going to be a bit surprised I imagine. It will take time, it will take realization on the part of the masses. PMs defiantly have their place- Right in between disaster and full out collapse. Which quite frankly, is more likely or at least going to happen sooner (by its very nature) than a full societal meltdown.
If you are a fully self sustaining individual that needs nothing from no one and no emergencies befall you then dont bother with PM, but if youre part of the vast majority that may need SOMETHING in the intervening time that it takes to degrade into TEOTWAWKI (…perhaps years???) then PM may have a place in your planning and preparations.
hi, I see alot of talk about how the American Prepper can buy coins, rounds and bars, etc
but i am in Australia, and my head is spinning looking through hundreds of webpages for choices for the Aussie market,
should i just go with Scrap Silver-looking through old coins and trying to pick up something of value?
thanks for reading
You don’t have any coin stores?
no coin stores, im new to prepping-started with food and water supplies, started to grow some veggies with little space i had, and now i am ready to move into the precious metal side of prepping,
but i am in Australia, and am lost at were to start. Lots of info on “buy America Eagles” and get pre 1966 dimes and so and so
but as an Aussie do you have any specific advice?
thanks