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Reserve Currency

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Re: Reserve Currency

Postby Permafrost » Thu Jul 27, 2017 2:40 am

daaswampman wrote:Have you ever seen a million in gold? It would fit in a small shoe box with lots of room to spare and weigh about sixty pounds. Really not much of an issue to hide or move. Swamp

One of the mines I worked at had a million $ bar from the mill that they would show new hires after they got a tour of the pour room. It was sloped in a way that made it impossible to pick up with one hand, and they told everybody that if they could pick it up with one hand and walk away they could have it. Everybody's fingers would slip on it, then one day a guy got it about a 1/2" off the table before it slipped out of his grip. They stopped doing it after that.
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Re: Reserve Currency

Postby Matte » Sun Jul 30, 2017 9:17 am

Years ago anyway, many accountants and financial planners recommended holding 5% of your net worth in PMs. I moved about 10% of mine into PMs 16 years back, and in hindsight it was a good financial decision - or has been so far anyway.

The US Dollar being the world's reserve currency today creates demand for them which artificially increases their value. When the USD loses it's reserve currency status those dollars will come flooding back to our country as other countries sell our dollar to buy whatever the new reserve currency is. An overabundance (supply) of US Dollars combined with less demand for them means their value will fall, that's economics 101. From a historical perspective, the USD likely won't remain as the reserve currency too much longer.

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Whether or not there's a change in reserve currencies in your lifetime is anyone's guess, but if it does happen you'll be thankful that you bought PMs.

Gold is the standard that fiat money is compared against, I think a lot of people don't grasp that fact. The value of gold doesn't change, it's the value of paper / fiat money that does. If the Fed/Treasury doubled the dollar supply tonight, gold would instantly jump to twice the current price. That doesn't mean gold is worth more, it just means each dollar is worth less. Gold (and silver) has had roughly the same purchasing power in terms of the goods/services it will buy as it has always had for thousands of years. Sure it varies some, but over the long term it averages out. Just using very recent modern times as an example, a loaf of bread in the early 1960's was about .22 cents, or about 2 silver dimes. Those same two 90% silver dimes today have a value of about $2.40, which is still about a loaf of bread in today's money.

As for moving PMs, a standard 20 coin tube of 1 oz Gold Eagles weighs about 1.4 pounds and will buy a little over $25,000 USDs today.

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Not too bad in terms of weight and size, and a lot easier to carry than $25,000 worth of rice or ammo anyway. If that coin roll melts and rehardens into a golden blob in a house fire (unlikely), it's still worth $25k in USD, minus a small assaying cost.
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Re: Reserve Currency

Postby daaswampman » Sun Jul 30, 2017 8:54 pm

Cadit wrote:Thanks for all the comments and yes; I did go overboard on the weight, but to make point. I see that each of you think much that same, it would be a burden to have a large amount of either. If I had any Gold or Silver, it would be in small amounts: 1/8 gram, 1/2 gram and so on. No bars, just old silver and Gold coins. I was a treasure for about 35 years and it's been reported that there is more money buried than there is in circulation. I've found my share of silver, but much less in the old gold coins. It's amazing how our former generations buried their money and valuables to keep them safe from robbers and looters, only to die and no one else knew where it was buried. The tells I could tell.

Anyway: Handyman had in my opinion one of the better options; burying your cash and make sure that your most trusted kin knew also. Maybe even have them contributing to the pot so that both parties were invested. Plus: I too am a firm believer in Multiple bury plots, no need to have all your eggs in the same basket as the old saying goes. I like panning for gold too, fun and relaxing, and if you happen to find a good spot, profitable.


You fail to mention that many fortunes are passed generation to generation, without anyone knowing or taxes paid! Any investment involves risks and requires some planning. I would wager more money has been lost in bank deposits, stocks, and bonds, than all the lost gold and silver in history.

I view it as insurance and hope I never need it, but should it be lost in time after I am gone and some treasure hunter has a good day - so what! Unless your kids are Preppers and mine are not, all the crap we buy, will most likely go for pennies on the dollar or go to the dump.

I know this as I have bought and sold many estates with some from prepared people. Most goes to the dump, some can be sold if dirt cheap, and there may be some keepers. Quality guns, vintage tools, real antiques, and PM are the only Prepper stuff that hold any real value. Once you assumes room temperature, It's market value and it just ain't worth much. Swamp
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Re: Reserve Currency

Postby sageprice » Tue Aug 01, 2017 4:23 pm

daaswampman wrote:The very rich did not comply and many shipped there gold overseas. That is why collectors can still buy antique U.S. gold coins in uncirculated condition today at modest prices! I wish the skeptics could visit Dubai and see how gold works. Dubai is now among a handful of cities, that the worlds elite are flocking too.

When the dollar starts to flop, gold will skyrocket as trillions of fiat dollars chase real wealth. Foolish people will accept those dollars as old habits die hard and they will still see dollars as wealth. There will literally be gold buyers on every corner. The world is not limited to America, our dollar, or our inflated ego!

A good example is what is happened in Iran. During their wars with ISIS etc., the pickers are making a fortune on the antiquities flowing out the country and they pay in gold. It is always the same and there will always be people with money and those who what more.

I dare anyone to show me a single documented time - in all of human history, when there was not a market for gold. It is nothing more than a poor persons fantasy, that we are all be equal and will starve together. Don't resent it - use it to your own advantage! What will the people with resources need and want? Swamp

Swamp, Gold is only a medium to trade. All the rest are credit currency and have no real value. Yes, there will be a market some where, but getting it there is another story. Brazilian miners only get 1/2 the value on the world market. So here is the point. You Have GOLD, I have gas. What are you going to trade me to take you and your gold to some place to trade your gold. No one else has gas and gold is heavy. WHERE are you going to sell it and HOW are you going to get it there? Remember you are at your remote BOL and there are miles of criminals before you sell and what curency will you accept.
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Re: Reserve Currency

Postby Cadit » Wed Aug 02, 2017 12:25 pm

As one pointed out; Gold and Silver has always been a medium of trade for thousands of years, I don't think that will change. What worked then will also work now or if the SHTF event. It may take a little time for that to come about and level out to a normal trade value. But I think it will. History has proven that time after time. What we need to do is prepare and be able to work within that mode of trade. Wither its goods or precious metals. If you have gas, I bet someone or group will be around the corner to take it. So' at first, everyone except your group if you’re in one, is your enemy and the only one you can truly trust is: yourself, excluding wife and kids.

Now I do agree that in the beginning; prices for things is going to be outrageous and costly. So; how will you handle that, some will resort to violence while others still or murder. But as in all things, even that will settle down after a time. If you have read any about the settlement of the west, much that same will be all across the country. Least that's how I see it, and we each have our own view point. That's what makes these discussions so great. I wish you all the best and a long life.
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Re: Reserve Currency

Postby daaswampman » Wed Aug 02, 2017 12:49 pm

sageprice wrote:
daaswampman wrote:The very rich did not comply and many shipped there gold overseas. That is why collectors can still buy antique U.S. gold coins in uncirculated condition today at modest prices! I wish the skeptics could visit Dubai and see how gold works. Dubai is now among a handful of cities, that the worlds elite are flocking too.

When the dollar starts to flop, gold will skyrocket as trillions of fiat dollars chase real wealth. Foolish people will accept those dollars as old habits die hard and they will still see dollars as wealth. There will literally be gold buyers on every corner. The world is not limited to America, our dollar, or our inflated ego!

A good example is what is happened in Iran. During their wars with ISIS etc., the pickers are making a fortune on the antiquities flowing out the country and they pay in gold. It is always the same and there will always be people with money and those who what more.

I dare anyone to show me a single documented time - in all of human history, when there was not a market for gold. It is nothing more than a poor persons fantasy, that we are all be equal and will starve together. Don't resent it - use it to your own advantage! What will the people with resources need and want? Swamp

Swamp, Gold is only a medium to trade. All the rest are credit currency and have no real value. Yes, there will be a market some where, but getting it there is another story. Brazilian miners only get 1/2 the value on the world market. So here is the point. You Have GOLD, I have gas. What are you going to trade me to take you and your gold to some place to trade your gold. No one else has gas and gold is heavy. WHERE are you going to sell it and HOW are you going to get it there? Remember you are at your remote BOL and there are miles of criminals before you sell and what curency will you accept.[/quote

That is why I have a plan! Part of my plan is not to need anything for years and that is in place. By the time I would need anything, we would either be on the road to recovery or beyond hope. I do not invest funds in metals that I should ever need to survive. Swamp
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Re: Reserve Currency

Postby NJMike » Wed Aug 02, 2017 4:52 pm

Just to play devil's advocate on PMs. :evil:

So, you (the generic you) have your PMs, and it's after SHTF, or things have settled down, and you think you're going to buy up all kind of things with off the books PMs. Or on the flip side you took advantage of less prepared people with gold trading them water, medicine, whatever and then amassed gold during SHTF.

So things settle down, and the old/new government steps in, says where are your records on this wealth, and perhaps they take it or put you in jail because you've avoided their taxes with your black market bartering transactions.

That sound crazy? See recently some activity in India on what that might look like (obviously some of these websites have agendas, but was an interesting read for me):
https://www.bloomberg.com/view/articles ... -more-harm
http://indiatoday.intoday.in/story/demo ... 14439.html
https://www.marketslant.com/articles/in ... ly-illegal
http://www.thedailyeconomist.com/2017/0 ... sh-is.html
https://www.bloomberg.com/news/articles ... n-succeeds

The gist of all this is efforts by a government trying to force wealth into the banking system so it can be taxed and controlled. It's not a new thing.

Without a SHTF, I fully expect that in a decade paper money will be phased out in many if not most developed nations. And use of gold for private trade in that setting will be highly discouraged, limited or made illegal for such private transactions. Imagine all those people that bought PMs or kept their cash out of the banks in large bill denominations getting swindled or squeezed like those in India now.

Just some things to consider. :whistling:

I'm not against PMs by the way. Personally my approach is to put first things first in terms of prioritizing survival items, self-defense items, then self-sustainability items, before PMs.
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Re: Reserve Currency

Postby daaswampman » Thu Aug 03, 2017 5:35 pm

Your links make a wonderful argument for owning precious metals in small units! Swamp
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Re: Reserve Currency

Postby Matte » Fri Aug 04, 2017 9:34 am

daaswampman wrote:Your links make a wonderful argument for owning precious metals in small units! Swamp


Divisibility being one of the requirements for real money, people (and governments) have been cutting PM coins for millennia. Unlike eggs, a shotshell, or Federal Reserve Notes, dividing a PM bullion coin into pieces doesn't destroy its value. Each piece retains its same fractional value as the whole. Fiat currency is not money, try tearing a $1 FRN in half see if you can get .50 for each piece ;)

There was a study sponsored by FEMA back in the 80's on how barter/exchanges/markets might function following a disaster on the scale of nuclear war, "Markets, Distribution, and Exchange After Societal Cataclysm".

Beyond just descriptions of the different types of exchanges and markets that would develop, the use of money (and where it's used and not used) for each is discussed too. The almost interchangeable way the authors use the terms "money", "cash", and "currency" might frustrate any goldbugs here, but the Keynesians probably won't even notice at all. :D

It's a long, mostly boring, read - But my take away from it, in short, is that barter will dominate at the subsistence and peasant marketplace levels. This is "hand-to-mouth" existence level exchanges mostly, a small amount of surplus salt exchanged for a small amount of surplus fish/meat. A few rifle cartridges exchanged for shoe repair. A days worth of food for 8 hours of unskilled labor. Preppers may not need to operate in these exchanges/markets much in the early SHTF days since we'll likely be living off stored goods or growing/producing much of them ourselves, but these will be important as the first markets that develop and form the basis for the larger ones to come. Establishing some level of trust with other buyers and sellers through these small exchanges in the early days might be beneficial later.

But the further you get away from subsistence level bartering and start dealing in larger and more diverse markets, then that's where "money" will dominate. The study uses the term "lumpy goods" to describe these types of transactions, "lumpy" not just meaning large or bulky (like housing, or livestock), but also for things like medical care (imagine purchasing an appendectomy, where you're trying to procure a surgeon, nurse, maybe an anesthesiologist, and all the necessary supplies - and purchase it as a single transaction). Lumpy would also include services such as transport/shipping, like hiring cowboys (Old West style) to drive those livestock you purchased to your door from 3 counties away - or contracting a rail train owner/operator with a working steam engine and a cattle car. This is where you want and need PMs, because they have always been money.

Oh, and lest anything think the study is just a politically correct and academic discussion with little real SHTF worth and skip it, things like criminal markets, militias, survivalists, warlords, and assassination services are mentioned too.
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Re: Reserve Currency

Postby daaswampman » Fri Aug 04, 2017 5:25 pm

Matte: it is a good article and I have read it before (studied), but it is not light reading. The only thing I would add is many markets will exist simultaneously, as they do now in every area of distress.

While the peons may be bartering for survival, others will be stripping the area of antiquities, gems, PM's and everything else of value! Just like what is happening now in the Middle East, Venezuela, etc.

The peon's "happy dream" of everyone suffering like them, being poor, and being equal has never happened. The reality is, many things will not be available from simple barter or skills and unless you have something of real value, you will do without.

My best advice: be something worthwhile and maintain a solid relationship with your local Sheriff! The "Wild Card" is property rights and who determines them! Deeds are likely to be as valuable as currency. Swamp
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Re: Reserve Currency

Postby MrDanB » Sat Aug 05, 2017 6:47 am

Since history repeats itself, it is wise to remember that the average Gov. Issued paper note lasts about 250 years. The debt ceiling issue is coming soon, gold and (especially) silver are heavily manipulated and many nations have been buying up metals in record quantities.
We are in a currency war right now, and currency wars always lead to real wars. During the Weimar Republic crisis, a fistful of gold would have bought an entire city block of downtown Berlin. Many currencies have failed since then. We all see what's going on in Venezuela right now. How far do you think metals will go during a full on currency crises? In Venezuela, today, a 1/10 Oz gold eagle will more than fill a freezer with meat. We pay roughly 140ish dollars for that same coin here in the US right now. Try filling your freezer with meat for 140 bucks!
It's all going to depend on how things play out. If it's full on SHTF, then metals will be the last thing on my mind. But if we continue down the "slow burn" road that were on, then metals will go up in value. At some point, the manipulation of the paper value of metals will end. An excellent video explaining all of this is:
https://youtu.be/iFDe5kUUyT0
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Re: Reserve Currency

Postby Matte » Sat Aug 05, 2017 10:10 am

daaswampman wrote:My best advice: be something worthwhile and maintain a solid relationship with your local Sheriff! The "Wild Card" is property rights and who determines them! Deeds are likely to be as valuable as currency. Swamp


Sounds like good advice. One of the reasons I'd be cautious about buying deeded or titled property if the SHTF, it'd be very difficult to confirm the seller was the owner (or even the sole owner) of the real estate or titled property. And even if they have title and sign it over for a fair price, the seller could argue they only agreed under duress after normalcy returns, assuming all private contracts made during the event weren't just declared null and void afterwards. I think there may be some precedance for that occurring in past disasters, but too lazy to investigate at the moment.

MrDanB wrote:Since history repeats itself, it is wise to remember that the average Gov. Issued paper note lasts about 250 years. The debt ceiling issue is coming soon, gold and (especially) silver are heavily manipulated and many nations have been buying up metals in record quantities.
We are in a currency war right now, and currency wars always lead to real wars. During the Weimar Republic crisis, a fistful of gold would have bought an entire city block of downtown Berlin. Many currencies have failed since then. We all see what's going on in Venezuela right now. How far do you think metals will go during a full on currency crises? In Venezuela, today, a 1/10 Oz gold eagle will more than fill a freezer with meat. We pay roughly 140ish dollars for that same coin here in the US right now. Try filling your freezer with meat for 140 bucks!
It's all going to depend on how things play out. If it's full on SHTF, then metals will be the last thing on my mind. But if we continue down the "slow burn" road that were on, then metals will go up in value. At some point, the manipulation of the paper value of metals will end. An excellent video explaining all of this is:
https://youtu.be/iFDe5kUUyT0


Haven't watched the vid yet, but Venezuela is a great example of a slow motion economic/political SHTF, and not too hard to imagine something similar in store for the US at some point. Like the frog in a slowly warmed pot of water, things just steadily get a little bit worse. I wonder how many Venezuelans wished they'd have packed up and left 5 years ago, and would love to do so now but just can't afford to? Read a news article recently that obtaining a passport and travel permission in Venezuela requires bribing gov't bureaucrats to get approved, so leaving isn't an option for the poorer ones (now) who burned though their savings due to inflation over the years. In prepper parlance they didn't bugout in time, and now they're trapped.

Speaking of SHTF bribes, thought about mentioning them in my last post but it was getting long'ish enough already. It is worthy of discussion I think. Whether it's bribing bureaucrats for an extra ration card, paying off the police/judge for some petty infraction enforced only as a means to generate revenue for the local government, or paying protection money to some criminal organization to leave you and your family/business alone. Still using Venezuela as an example, who (and how much) do you have to pay to keep you and your family members from getting 'drafted' into something like this?



I can imagine a lot of situations like this in any number of different severe SHTF scenarios. Government won't just "go away" but instead turn corrupt. Call it corruption, serving the greater good, face-to-face local "tax" collection, or whatever you like, but I don't see those in power giving it up willingly.
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Re: Reserve Currency

Postby ajax727 » Sat Aug 05, 2017 3:47 pm

At this time the mass are being driven to use plastic money , when we all are forced to use plastic and paper and coins are done away with ( this will happen sooner than latter ) . At that time your gold and sliver will be taken by force and those that refuse will be classed as criminals . This will be all about control of the people that is when it will all fall apart . Just like the fools that are willingly being chipped now , no chip no buying or selling . If you want to keep your job then you will be chipped and tracked . To some this is just to farfetched to be true but it is in the works now . Those of us who refuse the chip will be hunted down like vermin and removed or chipped and let lose . This battle is coming and if we win then the gold and sliver will be the rule of trade , but if we lose then we all are screwed . Sorry for the off topic rant but this will happen .
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Re: Reserve Currency

Postby PatrioticStabilist » Sun Aug 13, 2017 8:14 pm

DIL, says in S Korea they don't use pennies now.
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Re: Reserve Currency

Postby dmwalsh568 » Mon Aug 14, 2017 9:00 am

PatrioticStabilist wrote:DIL, says in S Korea they don't use pennies now.


Canada hasn't used pennies in years...they stopped minting them in 2012. Instead, folks now round to the nearest nickel. No sign of a push for all electronic payment up there - they just realized it costs more than a penny to mint a penny, so it was silly to keep making them.

I wouldn't be too sad to see the US do the same thing since I don't see myself using buckets of pennies in a home made forge post SHTF.

What I consider more problematic are places that say they won't take any bill larger than $20. That's more dangerous since it forces folks to carry lots of small bills (looks suspicious to any LEO looking to add to their coffers via asset forfeiture) or switch to credit/debit cards.

BTW, I try to avoid the slang terms of plastic for credit/debit cards or paper for cash, since some countries use plastic "paper" currency...Canada for example (why, yes, I do vacation up in Canada once a year - polite folks, good exchange rate and I can drive up there with only minimal hassle at the border each way.) :smartass:
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