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A Realistic View on Buying Silver for SHTF

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If there’s one hot-button topic that will divide a group of otherwise like-minded preppers it’s silver. On one end, you’ve got the gung-ho prepper that thinks silver is about as useful as a concrete parachute in any situation, let alone the big SHTF disaster. On the other extreme, we’ve got the guys that have depleted every cent of their savings and retirement and buying truckloads of silver, claiming that it will be the ONLY form of commerce once the aliens invade or the mutant super-flu hits.

In reality (like so many other things) the truth about silver is somewhere in the middle. Today we’re going to take a closer look at silver investing, using silver as barter and how much of your time and money should be invested in silver. Hopefully we’ll dispel a lot of the extremes from both sides of the argument and give you a realistic idea of how important silver should be to your preps.

 

Using silver as a SHTF barter tool

One of the biggest reasons preppers get into precious metals is the idea that when the S hits the fan, the only stable currency is going to be gold and silver. First and foremost, let’s get some perspective on this. The spiral of events that would have to happen for this to be true is pretty crazy when you think about it. Not only would the dollar have to lose any and all value within international trade, but over 300 million people in the U.S. would all have to agree that the old greenback, the tool used to measure wealth in America for hundreds of years is now worthless.

We can’t even get more than 10% of the country to believe that there’s really no difference between a Democratic presidency and a Republican-ran one. We can’t even get most people to understand that there really are tough times ahead that we should be preparing for. These issues are plain as day to anyone that doesn’t have their head stuck in the sand. Why then do so many preppers absolutely believe that somehow the entire country is going to collectively agree to lose any and all confidence in the dollar overnight AND also agree to use silver and gold as a currency? That would be the ONLY collective decision this country has ever made…and I’m not holding my breath on that happening.

On the flip-side of this argument though, the dollar absolutely IS losing its value. That doesn’t necessarily mean that it will be worthless at any point in the future, but it doesn’t take an economics guru to figure out that a dollar doesn’t buy you what it used to.

So where does that leave us as far as using silver as a barter tool? Well, I think it’s a matter of perspective and looking at this issue in a different light. Just because it’s very unlikely that the dollar will ever truly be worthless and silver will be used as one of the only accepted currencies, doesn’t mean we have to discount silver for bartering either.

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There’s a common misconception out there that the dollar, or any currency for that matter has some inherent value. It doesn’t. A dollar is only REALLY worth the cost of the paper and ink (and maybe the little security strip inside) used to print it. The dollar only has trade and economic value because people accept that it does. If every person in the world thought the dollar was worthless, then it would be. What this teaches us about silver is that even though .gov would like you to believe that precious metals aren’t a currency, it’s really not up to them. It’s up to us.

If everyone believed that an ounce of silver had the currency value of 3 pounds of steak, a movie for two or a couple drinks at the bar, it would. People and businesses would accept it as a form of currency. Although we’re far from the point of being able to pay your mortgage or bar tab in silver bars, there are plenty of people out there that understand the true value of silver and readily welcome it as a barter item for all kinds of goods and services, ESPECIALLY to people in the preparedness community.

Want to buy an AR but don’t have a grand (or more) in cash sitting around to put towards it? Well, an ounce of silver right now is worth right around $24.00 (give or take) which means that AR is worth about 41 ounces of silver. Since most barterers rarely use exact dollar figures, if you had 30-35 ounces of silver you’re willing to let go of, chances are you’ll find someone out there willing to make that trade.

 

Using silver as an investment

Many people on the silver bandwagon are taking a more “common sense” approach to silver by thinking about silver as an investment tool. Notice how “common sense” was used in quotes? Well that’s because in a lot of ways, these “savvy” investors are making a HUGE mistake.

A lot of these investors think that precious metals are the only way to hedge against the coming economic collapse or at the very least hyperinflation. They’ve cashed out their 401K’s and other retirement investments and they’ve converted their cash reserves into 100% silver in order to protect their wealth in the tough times ahead. It doesn’t take an economist to figure out this is a bad idea. Let’s explore why.

Has a country like ours, a country that’s more technologically advanced, economically savvy (I said savvy not smart!) and as diverse monetarily as ours ever had a REAL economic collapse? Has there ever been a country like ours, with a huge majority of its people investing in god knows how many various types of investments that’s actually gone completely belly up? No…there isn’t. There have been a few modern countries that have had true economic collapses, but comparing a country like Argentina to the United States is like comparing an apple to a massive dump truck of oranges. Not exactly the same thing.

The real fact is, no one knows what the “collapse” is going to look like. Even though it’s the one big-time SHTF disaster that is not only truly likely, but mathematically unavoidable, no one really knows how it’s going to play out. It’s pretty safe to say that a lot of people are going to get hurt, at least monetarily, but no one knows if the dollar will truly become worthless, no one knows if the government is just going to seize retirement funds, seize precious metals or any other drastic action. Heck for all we know, the actual effects of an economic collapse could be so slow and spread out that the majority of people won’t even notice it.

So, with that in mind why would we take every investment that we have and shove it into silver or gold when we don’t have to? Just like it’s not a very good idea to prep for that one, single doomsday event like so many of these “doomsday preppers” are, it’s not a very good idea to prepare for one, single doomsday economic event either. Precious metals are volatile. They’re one of the most volatile investments there is. The market moves up and down drastically all the time. By putting ALL your eggs into the precious metals basket, you’ve essentially replaced a volatile currency like the dollar with an even more volatile currency in silver. You haven’t really prepared for anything; you’ve just traded one bad idea for another.

The true prepared investor doesn’t pretend to have a crystal ball that’s going to forecast what the economy is going to look like next year, next month or even next week. Prepared investors diverse themselves by putting money in a lot of different markets and investment strategies. They do their best to weather the swings by covering for their losses with gains in other areas and they do everything they can to prevent too much of their money from going into one area.

Again, they don’t put all their eggs in one basket. Isn’t that what prepping is all about?

None of this means we should discount precious metals as an investment tool altogether. It means we need to do what we can to turn our “investors portfolio” into a “preppers portfolio”. Gold and silver have a place in that. Historically gold and silver have increased in value long-term, it is a potential way to hedge against inflation and it is very likely that as the dollar continues to lose value, precious metals will continue to rise. You could make the same argument for land and many other commodities; but again, we don’t know if that will be the case even 24 hours from now. When it comes down to it, to be a truly prepared investor, you have to look at the big picture and spread your investments out so that no matter what happens, you will not only be able to ride out the financial storms ahead, you just might actually make some money along the way.

 

So to conclude, investing in silver really doesn’t have to mean that you’re on one end of the extreme or another. It doesn’t mean stockpiling silver as a means of barter with the post-apocalyptic wandering traders and it’s highly unlikely to be your saving grace from a total economic meltdown. It also doesn’t mean that we should be ignoring precious metals either and using all our money to stock up on ammo and beans while ignoring the world around us. Like with so many prepper topics, it’s all about moderation. Looking past the extremes and deciding on realistic preparedness strategies that will be useful both now AND in a disaster scenario is the only way to be truly prepared for anything.

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3 comments

  1. Sensible Prepper

    You have a great article here. I also agree that thinking we will get rich from our silver purchases is a joke. It should be viewed as a hedge against the value of the dollar. Something a dollar would buy you in 1913, would cost you over $95 today. Even a gallon of gas bought in the early 1960s for a quarter (a 90% silver quarter) could still be bought with that same early sixties quarter. You really aren’t investing if you have all your eggs in one basket, and you’ll definitely cry if that basket is dropped.
    Thanks, SP

    1. Ready4ItAll

      Thanks for checking us out Sensible Prepper!

  2. American Patriot

    ” Just because it’s very unlikely that the dollar will ever truly be worthless and silver will be used as one of the only accepted currencies,” -it may not ever be completely worthless, since some people like to collect paper currencies that died in hyperinflation years after the event. Even the German paper marks burned to liberate their calorific content in the ’20’s are somewhat collectable today. The point is, wealth is not conserved today saving in dollar denominated paper assets.

    “If everyone believed that an ounce of silver had the currency value of 3 pounds of steak, a movie for two or a couple drinks at the bar, it would” -an ounce of silver, properly converted, DOES have currency value approximately equal to the examples cited.

    “Not exactly the same thing.” -NEVER think it can’t happen here. It will happen just as every other paper currency is eventually recognized for what it is. Death of the dollar is very likely what will lead to the economic collapse that you even recognize and agree earlier in this article is coming.

    “The real fact is, no one knows what the “collapse” is going to look like.” -this is both true and false. We can get a good idea of what it will look like by studying history. If you haven’t done so you might want to read ‘Nightmare of the Weimar Collapse by Adam Fergusson’. Previously, original copies sold for thousands on EBAY, circulating in elite and educated bankers libraries. Today it’s available electronically for free download from http://www.mises.org.

    “Historically gold and silver have increased in value long-term” -actually this is not true. Be careful to NOT confuse a dollar denominated price for value.

    “it’s all about moderation. Looking past the extremes and deciding on realistic preparedness strategies that will be useful both now AND in a disaster scenario is the only way to be truly prepared for anything.” I finally agree with you! Knowledge is power and also a form of prepardness. I’d like to highly recommend at least 1 more book before you endevour to write on this subject again. “Theory of Money and Credit by Ludwig Von Mises”. It’s also available for free download from the mises institute.

    Thanks for being passionate about this subject and if you read those two books I recommended, you will most certainly be more prepared for what’s about to happen!

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