Re-thinking the role of PM's post SHTF

Discussion in 'Financial Cents' started by Minuteman, Apr 3, 2012.

  1. Minuteman

    Minuteman Chaplain Moderator Founding Member

    I travel a lot to other countries and I always have carried a few gold and silver coins for emergencies. My thinking was that if the whole world came crashing down I could barter my way out of the country or at the least cash in some for emergency funds.

    I just returned from an extended stay in India. The trip itself was not unplanned but I had to leave much earlier than expected and that affected my budget. Then I ran into a lot of unexpected expenses once there, including an extra week of hotel and living expense. My bank didn't have a branch in India so my ability to access different accounts was limited. So I ended up running very low on funds. I decided that it was time to dip into my emergency reserve. I started trying to sell a couple of American Gold Eagles. Without going into all the details, I ran into one brick wall after another. No one would buy them even when I was offering to sell them for a few hundred dollars under spot. I don't know if they just didn't know what they were, if they thought they might be fake, I don't know. I spent days going to gold markets, jewelery shops, even to the Coin Collectors Club in Delhi and could not find one single person interested in them. I even ran ads on their Ebay and a similar site Quikr. No response.

    I even tried to sell a few silver Liberty dollars thinking that a lower value might sell better. Nope.

    So that got me to thinking about just how practical will PM's be post SHTF. We always talk about the value of silver and gold in an economic collapse but if the dealers who buy those now are not available, how practical will it be? Will the everyday common person want to take coins in trade for goods? Will most people even realize their value? Would you be able to go to a post SHTF farmers market and trade pre-'65 silver for tomatoes? I am beginning to think that they might not be such a valuable item as we have always thought. If I couldn't sell them now, in a decent economy, how much luck would I have in an economic tsunami? It may be a better scenario in America, with American currency, but what about Krugerrands and even Maple Leafs? How much trouble would it be to sell or trade them in a devastated economy, to people who may never have seen one?

    I may convert a larger portion of my PM reserve into a more practical barter currency. Like ammo. I think a person might have a much better chance of trading boxes of .45 ACP for some tomatoes than pre-'65 dimes.
  2. UGRev

    UGRev Get on with it!

    Don't forget that you were still trying to sell PM's in a world where FIAT is still more readily recognizable as currency than PM's. It's quicker to determine the value of it and easier to use elsewhere. If someone accepted gold in a liquid fiat system that is still perceptually viable, then THEY now have to find a way to turn that into their local currency.

    Put it another way.. if a widget is roughly the same as a snoogit, but widgets are the local currency, what would you accept as a daily business transaction? On the other hand, if widgets were hyper inflated, I'd be willing to bet that you could use your snoogits to buy what you need rather easily.
  3. Suerto

    Suerto Monkey+

    I heard that there are a lot of counter fitting going on in the PM market as well, and seeing a silly westerner trying to sell gold might have turned them off..

    Like some silly westerner having a foreigner walk in and try to sell some gold, would be skepticle..

    But I agree with you, be wise to spread your hedges with other barter items..

    Buddy of mine has ammo he can't utilize, solely for barter purposes..

    I have ammo components that I can throw together, for barter purposes.. Bought back in 08' when I cashed out some, and picked up PM's as well..

    On a side note, I got fellow oilfield Indian friends there (educated here, fairly respected families there), if you ever find yourself in India, coulda helped you out through the grapevine..
    Just throwing that out there as well
  4. E.L.

    E.L. Moderator of Lead Moderator Emeritus Founding Member

    It's hard to eat PMs.
    It's good to have some, but if things are really bad, they won't mean much. People will be looking for tangible items. Guns, ammo, food, shelter.
  5. Minuteman

    Minuteman Chaplain Moderator Founding Member

    That's was my thinking too. I am fairly well divested. I have stores of ammo and other tangible things that would be highly prized in a post teotawaki world. But I don't know how valuable the PM's would actually be. You can't eat gold and silver coins. Aside from a post apocalyptic world, I am reevaluating my reasoning of being able to barter them for a ticket out of a foreign country in a dire situation. I keep a stash of $100 bills for that as well but with things like they are I don't know how much good that would do either.
  6. E.L.

    E.L. Moderator of Lead Moderator Emeritus Founding Member

    Next time let me know, surely there are Western Union locations in other countries.
    gundog10 likes this.
  7. Redneck Rebel

    Redneck Rebel Monkey++

    90,000 of em in India
  8. Minuteman

    Minuteman Chaplain Moderator Founding Member

    Yep there are. I sold them to a good friend who wired me the money and trusts me to deliver on the coins. But without internet, or even possibly phone service. I'm thinking along the lines of the revolution in Libya and to some degree in Egypt, both places I have been. How hard would it have been to barter an American Gold Eagle coin for passage out of a war zone?
    They have a lot of old gold coins where I am now that I am thinking may be more recognizable and easier to trade. I went to one coin dealer in India who had several Indian gold coins and even some British trade coins. If I had of had some of those I don't think I would have had a problem.

    And E, I know I could have called on you bud. And other family I could have called on, but that's not my style. If I can do it on my own I will, and if I have to turn to a friend I want to make it beneficial. I don't like being indebted to anyone.
  9. pmbug

    pmbug Golden Cockroach

    I'm guessing the Indian market would have been more receptive to products they are more familiar with. I imagine it would be similarly difficult to sell middle eastern Dinars in the USA.

    What products did the locals over there have for sale? 1ozt bars/ingots? What brands?
  10. Minuteman

    Minuteman Chaplain Moderator Founding Member

    A lot of very old Indian coins. I live in the Middle East and you can find Gold Sovereigns and occasionally Gold and Silver Dhalers in the markets here. But then the question is, how easily would they be to trade in a post SHTF barter market in the U.S.? I'm thinking I will buy regional coinage while here then sell it before I return to the U.S. and convert to U.S. coins. I'm thinking that with the price of gold, even in today's market, never mind what it would be worth in an economic collapse, people are going to be very skeptical and wary of fraud anyway, and having something unfamiliar to them may not be worth anything.
    VisuTrac likes this.
  11. Tikka

    Tikka Monkey+++

    In a post shtf world, as compared to real needs PMs aren't worth much. In ancient times, PMs were more for the "upper crust" than the rest of us.

    In a short term event, Katrina etc; PMs would be valuable but highly discounted. People would probably want to see your driver's license also. ;)

    The driver's license has the potential to be the place mark. If it no longer offers recourse; PMs may lose value or become worthless at least they will to me.
  12. fedorthedog

    fedorthedog Monkey+++

    I think that at the beginning of an event gold and silver will have an inflated value. As things taper off people will come to the conclusion that little or no demand means no value. It will take some time for the value to return and society reestablishes itself.
  13. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    I view the role of PM's as something to store value in the time of transition.

    Take for instance, I buy 10 ounces of silver now for 310 and 1 ounce of gold for 1660 today.

    total cash outlay is 1970 FRNs.

    Lets say that in a year a
    loaf of bread goes from 2 to 3 dollars
    a gallon of gas goes from 4 to 6 dollars

    basically the value of the FRN is in the crapper.
    what you could buy for 2000 will now cost you 3000.

    I HOPE at this time the value for my PMs has now gone from 1970 to 2955 FRNs.

    let's say they come out with a new fiat currency the NEWFRN and you trade in your old bills at 1 : 0.667 ratio if you had saved 1970 old FRNs bills you would get only 1300 NEWFRNS

    If however you had converted those FRNs to PM prior to the inflationary time you might be able to convert the PMs to FRNs (2955) and those would be worth the original 1970 NEWFRNS

    Take a look at the past (no guarantee of future results but ...) Back in the 60s you could have bought a gallon of gas for .25 cents. You know, if you had the same 1960's quarter today (silver) you could get 1.25 gallons of gas ($5.50+) as the coin contains about .1788 troy ounces of silver.

    PM's are not for everyone but there may be the possibility to use it as a vehicle to hedge against inflationary pressures if done wisely.

  14. dragonfly

    dragonfly Monkey+++

    I only have a few bucks worth of silver....a friend kept telling me to get gold, but where I intend to go (bug out site) there's NO way on this earth I'd get any fair exchange as there are no banks for over 60 miles (not even a town for 11) and I doubt the gold would have any value ( for me) if things go sideways, especially out in the boonies! Silver Coinage people recognize and accept....I put my extra funds ( of which is dwindling anymore) into barter stuff .
    VisuTrac likes this.
  15. Nadja

    Nadja RIP 3-11-2013 Forum Leader

    Barter stuff will do much better the pm's. I have a good friend that is crazy about buying silver. He thinks that if the shtf, he will be able to go to town (yea right) and use silver to buy food and gas. I have 5 acres of tators, you have silver coins, and you come over to my place to trade for my tators. You lose, as I can't eat the silver and can trade my tators for maybe some beef or pig etc. I doubt very seriously that very many people would trade you for pm's for much of anything that you really need to survive.
    bountyhunter and Silversnake like this.
  16. HK_User

    HK_User A Productive Monkey is a Happy Monkey

    If your attempt to sell was in the time frame of your first post then you may have hit the most recent low point of gold purchases in INDIA. Little in any buying or selling.

    Then there was also the recent TAX increase on gold sales in India and a reaction of the India gold marketeers to shut down all sales! This as a "Shove It" move against the India Gov.

    None the less, gold trinkets in India are a more saleable item and easier to check. Maybe next time you could have a heavy chain or a wrist wrap of some kind.

    Just be sure you know the weight and purity so you know how much to ask on any given day.

    BTW, actual gold and silver chains were more common for barter in the past. This so a link or so could be cut off and sold as needed.

    Also you can claim the Gold or Sterling Silver as you enter and be safe having it as you leave or not.

  17. Tikka

    Tikka Monkey+++

    How many here can test to see if it is real gold or silver?
  18. HK_User

    HK_User A Productive Monkey is a Happy Monkey

    Pretty simple, kits are easy to purchase and all real preppers should have this skill set.

    None the less I believe the first post was about trying to sell to "Gold Merchants" etc. So of course those folks as well as Jewlers have the min. equipment. Check around and you'll find it's not that big a deal.

    On track, on time.
    VisuTrac likes this.
  19. BTPost

    BTPost Stumpy Old Fart,Deadman Walking, Snow Monkey Moderator

    Real Golds Density is a common way to distinguish between the different grades. Figure out the volume, and then weigh the piece, and you will know, exactly what it is. Not hard to do if you have a MicroGram or Grain Scale, and know the temperature, of the water used to figure the volume. High School Chemistry 101.... Gold Plated Lead is totally different... ..... YMMV...
    VisuTrac likes this.
  20. Tikka

    Tikka Monkey+++

    Here is how to test and here is how to beat the test; the YMMV was quite appropriate. ;)

    In today's world gold has value. In a post shtf world, how many here plan on accepting gold in trade for their medicines, preps, tools or weapons?
    Nadja likes this.
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