Many people talk about a recurring economic crisis in US, and look for means to place their money so their investment won’t become useless once the economy hits the ground. For example, a reader recently wrote:
“I am a fan of Survivopedia and I love your articles. I just read your article “Top 4 Things to do Prior to the Dollar Collapsing” and it is the first thing I have read that is helpful. Everything else is for millionaires to get off shore banking, get lots of gold, buy real estate and on and on. I don’t have that kind of money… only a few thousand dollars as an emergency fund… I am 72. It seems to me it is stupid to hand on to the money if it is worthless. Is there some other means of currency exchange that those in the know are doing instead?”
Dianne
This is a very good question that Dianne asks. Before anwering, let me say that I am not a professional financial counselor; all I am is a man who tries to do his best.
Having said that, the standard in the financial investment community is to put your investors money beside your own, taking the same risks and receiving the same benefits. So, based on that standard, the best I can do is to tell you what I’m doing myself.
What a Financial Collapse Isn’t
Let me start by saying a couple of things about what a financial collapse isn’t.
- It’s not a total breakdown of society. While we can expect crime to increase, as desperate people try to meet their needs, the police and the courts will still be working, trying to track down criminals and put them in jail.
- Secondly, a financial collapse doesn’t mean a government collapse. Our government, like all governments, is a parasite. As such, it will keep itself alive, even if that means killing off its host. That means that they will be continuing the poor fiscal policy that is causing the collapse in the first place, taking the money that you and I need for recovery.
- Finally, a financial collapse is not permanent. Most only last a few years. Even the worst collapse in history, the Great Depression, was over in ten years. So it’s reasonable to assume that any future collapse will end as well, probably after a few years.
Why Regular Investments Won’t Work
The advice that the reader mentions for the millionaires may not even work in the face of a financial collapse. Moving money offshore doesn’t guarantee anything. In fact, the 2008-2009 housing collapse affected the economy worldwide, not just here in the United States. The same happened in the Great Depression.
The fact of the matter is that the U.S economy is the world’s largest. Even China’s economy, which has been growing to the point where it is now the world’s second largest, is less than half of the U.S. economy. So, anything negative that happens to the U.S. economy is going to have international effects.
There is no safe place in the world’s financial markets for money, including putting it in foreign money.
I would have to put electronic money, like Bitcoin in the same category as foreign currencies. Supposedly Bitcoin is totally independent of the dollar, but I’m not so sure that’s true.
People buy Bitcoin with dollars, so there is a connection. As there has never been a test of these alternative forms of money in a serious financial collapse, I wouldn’t put my trust in them.
Even a savings account is unsure. In both Greece and Cypress, the respective governments directed banks to skim off of people’s savings accounts. That could very well happen here. So the last thing I would do is to keep more money in the bank, than what I need to pay the bills.
Inflation is so low right now, that a savings account is a joke anyway. You may as well take that money as cash and stuff it in your mattress, like the gangsters of old. Better yet, find a place to hide it that criminals won’t suspect. Avoid the master bedroom, as that’s the first place they look.
So What Can You Invest In?
Okay, so let’s say you have a few thousand dollars that you want to invest for a rainy day. What can you do? The most secure investment on the face of the Earth has always been precious metals, and I’d have to say that it won’t change.
If you’re like Dianne, you’re probably thinking that you don’t have enough to invest in precious metals. I used to think that way too. That was when I was thinking of investing in gold.
It takes quite a bit of money to buy even one ounce of gold. So, if you’re going to invest in it, you need a good pile. But silver is another matter. I like to think of silver as the working man’s investment, because you don’t need as much money to get started.
Historically, silver has actually been a better investment, with better returns, than gold. That’s why the little bit of investment money I have is in silver and not gold. For $100, I can buy several ounces of silver, enough to make it worthwhile.
I’d recommend buying silver coins, rather than silver ingots. Back when it was illegal for Americans to own their own stocks of gold, an exception was made for gold and silver coins. You couldn’t own ingots, but you could own all the coins you wanted. If such a law were to be put into effect once again, I imagine it would have pretty much the same restrictions.
One of the things we can expect in a financial collapse is that people will turn to bartering goods, and turn away from money. That’s typical in such cases. When that happens, silver coins may very well become the underground coin of the realm.
While gold coins will be worth so much that they are impractical as a means of exchange, silver won’t be. It’s value might make it ideal for people to use.
My Favorite Investment
My all-time favorite investment isn’t gold or silver, it’s food. That may sound a bit strange as an investment, but I’m basing that on the current state of the economy, as well as what I’ve seen happen in other countries which have suffered a collapse.
People always need food. So, regardless of what happens in a financial collapse, they will be looking for food.
Unless you live in a rural area, where people do a lot of farming and gardening, you’ll probably find yourself surrounded by food shortages. In such a case, the value of food will increase exponentially.
This has happened in Argentina, Greece, Cyprus and Venezuela, amongst other places. It even happened in occupied Europe during World War II. People in the cities were so desperate for food, that they would fill their suitcases with the family silver and head for the country, to visit “relatives” on the farm. There, they would find an amiable farmer and trade their silver for hams, sausages, cheeses and butter.
In Argentina hundreds of bartering co-ops rose up in the midst of their financial collapse. While they varied in their form, they all shared one thing in common, the most common items bartered were food items. Food was in short supply in the city, even though there was plenty of it in rural areas.
But food isn’t just good as an investment against an economic collapse, it’s also good as an investment against inflation. Currently, the official government statistics put inflation at less than one percent, and have had it there for some time.
At the same time, food has gone up in price an average of 8.5% per year. That means that if you buy $1,000 worth of food today, in five years it will be worth $1,500! That’s a good investment, any way you look at it.
You don’t even have to sell that food to cash in on that investment either. All you have to do is consume it, taking the money you would otherwise have to spend on food and using it for other needs. Doing it that way would be just like cashing in any other investment.
Prepare for a Barter Economy
I’ve mentioned that countries which have suffered economic collapses ended up with a barter system taking over for their failed currency. I’ve also mentioned how Europeans traded silver and other valuables for food during World War II. Many a farmer came out of that war a whole lot richer than they went into it.
The thing is, any economic collapse will eventually end. We may not see things go back to normal, but there will be a “new normal” which will emerge, just as it did in Europe, after World War II. When that happened, the farmers dug up all the silver they had buried and sold it off, making a huge profit. That can and probably will happen again.
If you have the foresight to invest in enough non-perishable food to use it as trade goods, the financial collapse will give you the opportunity to barter that food for other things of value. Basically, the value of those things will decrease, because they are not useful for survival, while the value of your food will increase, because people will need it to survive.
When the economy settles at a new normal and people aren’t worried about starving to death, the silver and jewelry will gain in value once again, while food will return to a more reasonable price.
I’d also add alcohol, tobacco and key essentials like toilet paper and personal hygiene supplies to your bartering stockpile. The hygiene items will probably become as hard to find as food will, making them equally valuable. As for the alcohol and tobacco, sales of those always increase in a time of crisis. It seems that people want to escape from their problems, rather than facing them.
Tobacco in the form of cigarettes doesn’t store well for a long period of time. But tobacco alone will, especially if it is packed in sealed containers with oxygen absorbers. Add some rolling paper, and you’ve got the means of people making their own cigarettes, just like they used to roll them in the Old West.
The key to making a profit off of bartering isn’t just stockpiling food, but is knowing how to value the items that you will be receiving in trade. There’s an awful lot of fake jewelry around, which looks quite real. So, you’ll have to know how to tell the difference. That doesn’t just go for the gold and silver, but for the stones as well.
The other part is establishing a value for the jewelry, silver or other valuables, based on the mid-collapse economy. That’s going to be a little harder. You’ll need to keep your ear to the ground, so that you know what others are doing. You’ll also need to be able to read the people you’re bartering with, so that you’ll know how much they are willing to give up, in order to get your food.
Remember, you have the upper hand; and while you don’t want it to be a heavy hand, you want to be fairly compensated for your investment. So you need to figure out what makes it a good trade for you. If they don’t want to trade, then you can much more easily wait for another day, than they can.
When it comes to that, there will be an element of risk involved. Whatever you have invested in the food will be at risk. But in reality, that’s a pretty small risk. As I already said, you merely need to hold onto the food for it to go up in value.
The bigger risk is of people who might want to take what you have from you by force. You’ve got to be ready for that, ready to defend yourself, and ready to defend your profits.
But then, any investing is risky, even though the risk doesn’t usually include looking down the muzzle of someone’s gun. All you have to do is be prepared, and you can turn the tables on anyone who wants to take advantage of you.
This article has been written by Bill White for Survivopedia.
gena | October 30, 2016
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The statement that people were allowed to keep gold coins is completely wrong. All gold coins had to be turned in and it was illegal to own any and illegal to buy or sell them. My mother had been given a $10 gold piece by her father when she was born in 1917. She held on to it, illegally. My father, years later, tried to sell it, and all he could get was about $200 because the dealer told him, correctly, it was illegal for him to buy it. A few years later when it became legal again to own them, it was worth several thousand dollars.
Jewelry, on the other hand, was allowed to be kept, but all gold coins were mandated to be turned in, and were supposedly melted down by the govt.
Mahatma Muhjesbude | January 1, 2017
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Yes, and banks then weren’t allowed to exchange gold either. Even now go into a bank and try to exchange your half oz. gold eagle for cash dollars and see what they tell you after they stop laughing.
Silver wasn’t worth anything significant for commerce back then so it wasn’t included in the confiscations but today, especially during a bad economic break down, ALL forms of potential ‘currency’ will be sanctioned, nullified, or seized/confiscated. There will be bounty snitch payments to those who inform on those who hold out. And the government and their gestapo banks will control the horizontal and vertical of ALL your social financial transactions to any extent they desire.
There’s another ‘progression’ of the Indian take over of the cash flow commerce of the public day to day transactions that worked well enough for the G during the Viet Nam War. which kept the underground cash flow and black market from getting out of control. Every few months or so they changed the color of the MPC script money issued by the government for the troops and general interest commerce (the local Vietnamese currency Piasters was virtually worthless) which held a value pretty close to the dollar at the time.
So one day you’d wake up if you were a profiteering black marketor or a hoarder of MPC ‘cash’ and you woke up one morning and your Green Military Payment Certificates suddenly became purple!! And were worthless. Unless you exchanged them in time which would make certain amounts subject to confiscation.
That would be pretty easy to do here,
Also, most people don’t know that Bitcoin was/is a black government experiment precursor to a cashless society to test the every day viability.
People forget that although the Totalitarian agenda first requires making enough agenda laws that make enough people criminals to use the anti-Constitutional 68′ Gun Control Act laws which made it a permanent ban to have guns after you’ve been convicted of anything, which effectively disarms a populate eventually, the second necessary control measure is to have complete knowledge of, and then electronic access to all your currency/monies by eliminating private cash transactions and implementing digital monies. Sort of like their OCD of ‘eliminating the so called gun show looplhole’ of private firearms transactions.
Since your own bank now must, upon government demand, open your ‘private’ bank account info for their scrutiny (ostensibly to see if you are making any ‘suspicious’ terrorist transactions) any time they ask for it and the bank even must automatically report certain ‘abnormal’ suspicious activities concerning amounts or frequencies of withdrawals, deposits, etc., so the ‘gear up’ for a cashless society is alive and healthy which reveals a lot about what’s really going on in the fading grey to black areas of government, even in view of the new regime coming to power?
The second and final step to complete Totalitarian Authoritarianism and social financial enslavement will be eliminating private cash transactions completely. They are already ‘training’ us for that with the new APP for your alternative brains, your ‘smart’ phone. ( named as such because people are stupid), that allows you to shift around cash to other person’s smart phones ‘wallet’, just as if you reached into your pocket and peeled off five bucks to the driver to pitch in for gas.
So investing in precious metals if you’re just an average person trying to make it from paycheck to paycheck, or even if you think you’re pretty well prepared and have a modest savings account stash, is like going to war, getting in your foxhole, and then throwing all your ammo out over to the enemy.
Remember, Gold is NOT even a legal currency anymore. It’s just another commodity. Subject to the whims of supply, demand, and corrupt manipulations. It doesn’t even back our dollar anymore!
If it were even a socialistic ‘smidgeon’ as good as Willy Devane on the TV commercials purports it to be from his million dollar ranch, why are all these brokers selling it, instead of hoarding it obsessively instead of anything else??? LMAO!
Because it is NOT going to be worth much at all during a real bad economic/financial crash/collapse. Just like any other commodity it will fall with the demise of the dollar value. NOT be worth MORE as an alternative emergency currency? That’s just another hoax the elite profiteers are trying to bull on the masses of dumb asses.
And because it is a ‘non-essential’ commodity compared to ‘pork bellies’ and energy, and corn/cotton/soybeans. You can’t even use it to wipe yourself with after you Hershey squirt your drawers when you see the first round of vicious roaming predators come down your driveway armed with top grade military weapons to do a little ‘friendly bartering’ with you?!
Honest ‘experts’ know, that in fact, in a collapse where almost all commercial taken for granted business comes to a halt, and virtually everything is NOT on Order anymore, nor will it be ‘in stock’ anymore for the forseeable future, and you’re down scraping for and eating scraps and bones.,,
What makes anybody think gold will be worth much of anything at all then, during that time? I’ll never take any of your stupid gold eagles in trade for anything at that point.
Because the previously mutually agreed upon collective public perception of value which makes a piece of heavy shiny useless metallurgy worth hundreds of dollars an ounce, in our current capitalistic paradigm, would be Gone then?
I’ll trade you food for fuel, or ammo, or moon shine, or something, but I don’t want your ‘precious’ LOL -too heavy to carry around- chunks of shiny rocks?
And those who hoarded more silver and gold than supplies will never get to ever ‘benefit’ from it’s future ‘investment’ potential in a serious United States Collapse because, again, our paper dollars are not guaranteed by gold, but since they didn’t prepare correctly, they won’t have much of it left anyway they’ll wind up just giving most of it away for little or nothing in terms of scraps of bare essentials they didn’t stockpile instead of ‘precious metals’.
And even though the die-hard anally retentive gold bugs keep saying that gold endured the test of time, and will always ‘be back’, that’s not necessarily true anymore with the radically changing world economic dynamics, AND, again, in a very ‘Serious’ economic American breakdown, I wouldn’t advise anyone to hold their breath ‘waiting’ for it to return as a ‘good’ investment, You might not live that long, especially if all you had counted on, was your ‘precious metal’ stash?
There’s only one thing to invest in for a long term economic collapse, It’s what the smart survivors in Venezuela’s current collapse prepared for. The only ones making it to some extent now, while the rest of the populate is starving or beating themselves to death (guns have all been seized by the military police) with sticks for anything they desperately need. Some people saw it coming and changed their existentialism format for the eventuality.
It’s known as creating an expedient SSPE (Secure Self Sustaining Personal Environment). Not the same as emergency survival/disaster stockpiling/prepping.
gena | January 1, 2017
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Agree with you 100%. People who are relying on gold will find that the “value” of the gold will be set by the person from whom they are trying to exchange their gold for the other person’s life sustaining commodities. And it will be a lot less than they apparently think it is worth, certainly far, far less than what the gold was purchased for. While food, toiletry items, water and such will greatly increase in value, gold will drop like a pregnant pole vaulter.
Mahatma Muhjesbude | January 2, 2017
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LOL, Pregnant pole vaulter, good image! Okay Gena, I save this information only for a ‘worthy’ few because otherwise it’s a waste of my valuable and diminishing time in life, and truth be told, as much as the people who make a living off of prepping and survival stuff like to disagree with this, everybody will not survive the ‘big one’. That includes most preppers as well.
I won’t go into the psychological fundamentals now, but suffice to say it’s mainly because of intransigent and gullible mentalities with people who simple refuse to Know and Understand, and instead prefer to believe those who actually Know nothing who are also putting forth things that simply are bullshit, mainly for greedy profit gains.
Famous Marketing Guru Seth Godin wrote an entire book on how virtually all marketers are liars by necessity of the professional function.
So here’s a ‘real’ prophesy for Gold in the future. For people like you and others who don’t want to live in a mind controlled fantasy world.
First understand that the idea of Gold having any type of commercial monetary currency value comes from one thing and one thing only. The mutual agreement that it is ‘valuable’ by everyone concerned. That’s it! Nothing else. Not scarcity, not how shiny it is, Not that it’s the best electrical conductor or the Annunaki mined it to save their atmosphere. Nothing but the contract between humans that this particular combination of physical molecules will become the commodity which will be universally accepted in trade for other commodities, therefore, by itself, be of high ‘value’ in human integrations.
And by the way, it could be anything for that matter.
In some cultures gold wasn’t the most valuable ‘currency’ at one time or another. Sometimes it was Sea Shells. Depending upon what island beach your gold laden Ship sank off of and washed you ashore at?
Next grasp the current reality that the powers that be and the New World Order need to also need to control and be able to seize everyone’s money upon demand to eventually
attain a workable Totalitarian society.
Thanks to modern high Tech, the best way to do that is to become a cashless society and become a digital virtual currency society. This way they can monitor even the smallest private transaction. And gain from it. The technology is already here and established in the current and evolving wireless evolution.
Business’ and banks actually like it. Even now some businesses like airlines and government licenses refuse to take cash. Only cards.
So it’s going to be a soft-forced compliance. Yeah, you don’t have to use your card, you just won’t get the drivers license.
Needless to say the G is creaming all over itself with this. Nobody will be able to hide their little cash and carry side income scams without paying taxes. And the illegal drug money laundering will become a pipe dream.
So like totalitarian gun control, this destruction of private property (soon to be an oxymoron ) transaction will be incremental until one day you go to the bank to make a deposit in cash or buy something from your store with cash and they say, ‘you know we’re not accepting cash anymore, new banking laws, you know. Helps the Crime Prevention efforts for Public Safety.
“…you cannot socially engineer the nation overnight. Rome wasn’t built in a year. It takes time and a slow but sure environment of constant agenda based change. That way the populate doesn’t even notice much until it’s too late to do anything about it.” P. J. Klipangle.
So when we become a digital cashless society what will happen to gold and precious metals then?
Not much, except it likely will no longer be a commodity much different than oil or pork bellies. If it is not a legal tender for the U.S. anymore which wasn’t even used to back the dollar anymore, because the dollar, and now a basket of other currencies are the world reserve (accepted by mutual lagreement) primary negotiable instruments, then what happens when digital currency is the new world reserve currency, and not required to be ‘backed’ by gold like the current reserve currency U. S. Dollar is NOT backed by gold anymore? Because everyone will ‘agree’ that digital currency is worth something as a main currency, while gold
is not even worth it’s weight anymore as a electrical conductor or body bling?
That’s why profiteers like Jim Rickerts say amazing things like after 1/26/2017 gold will be worth over 10k an oz. LOL!
He knows once digital money takes over completely, that gold will be worth…well, not what he thinks it will ever be.
People like him also know that with all the carefully planned ‘hype’ the last few years by manipulators, that gold mining technology has advanced to a point where gold is NOT as scarce as it used to be.
Of course, like the diamond industry, this will be ‘controlled’ distribution to keep prices up. If DeBeers unloaded all of their diamond inventory on the market at once, real diamonds wouldn’t be worth much more than cubic zirconium.
Are we starting to ‘get it’ yet?
Let me try it one other way. If you are being told by so-called prepping experts that you must have precious metals to better survive a breakdown, they are lying to you.
If the economic breakdown is temporary, only the current legal tender currency will be ‘worth anything” in recovery. Especially in straight transactions. Because that’s the only thing that will be accepted, uh, ‘DUH’?
If it’s all digital money when it happens, then your back up files or specially encoded/encrypted little jump drives will preserve all your ‘money’ and restore your accounts when the government is up and running again.
If it happens while cash is still king, then your cash stash will get you back on your feet again. (that’s why super rich have been stashing more cash than anything else which is why there’s actually a cash liquidity shortage now in circulation)
If there is an apocalyptic event and most of civilization won’t be normal for many years, then gold will be about as valuable to the average person as that expensive luxury car your neighbor has gathering dust in his garage with an empty gas tank and dry rotting tires.
And if he and his family are constantly short on basic supplies, I’ll guarantee he’ll give it to you for a single jar of peanut butter.
debbie kennedy | November 4, 2016
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Many people can’t afford gold, but they can get some silver coins (poor mans gold).
silver is set to rise more than gold percentage wise. I agree with the author on food as an investment. Everybody has to eat. Food is real life insurance, not money to leave your family when you die.. but an investment in your future that keeps you alive. I bought long term food storage in 2012 and that food is worth a lot more now than what it cost me then, and the food has a 25 year shelf life. So with food tucked away for the hard times I feel a lot safer than I did before I got the food. My family will not go hungry if the stores are empty.
Our grand parents grew a big gardens and canned food to last through the winter. This is a habit that has been lost in later generations, with grocery stores all over town nobody thinks there can come a time when you can’t buy food. Very few live where they can grow part of there own food now, and most of those that could still don’t they have no time and food is easy to get.
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Scott Spence | November 29, 2020
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Electronics, solar panels and other items where silver is absolutely the best element on the periodic table, and somehow it is all of a sudden it will become worthless.
I call BS on that.