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I go back and forth on gold a lot. I keep a very small amount of my money in gold, but I’m literally thinking “if things really get down to it, I can trade this

I go back and forth on gold a lot. I keep a very small amount of my money in gold, but I’m literally thinking “if things really get down to it, I can trade this for food” But that type of mental exercise does not work well for many people. Especially imagining a system where our fiat currency is effectively useless.

harambae 6y ago
If things really get that bad (and I don't think they will) you could probably trade ammunition for food as well. It also lasts a very long time (when stored properly) and arguably has more of an intrinsic use than gold. There's a significant resale overhead to gold. Who's to say it's not tungsten somewhere in the middle? Are you going to microprobe the whole thing in the post-apocalyptic hellscape?
whatshisface 6y ago
Expecting that you'll be able to trade gold for food is assuming that the state after the collapse will fall into a very narrow band of "collapsed enough that the financial system is gone" and "not so collapsed that the food supply is gone." You might even call it... the Goldilocks zone. ;)
- ogre_codes 6y ago
  And for that matter, assumes you will be able to find safe places to trade gold for anything. Unless we go back to a gold-rush style economy where there are scales all over the place you can trade gold by the gram, the smallest tradeable gold will be coins which are worth $1600+ each. Try taking that to the local grocery store.
  - secondcoming 6y ago
    Half Sovereigns are ~$300 https://www.atsbullion.com/gold-half-sovereign-coins/ https://www.atsbullion.com/gold-half-sovereign-coins/
    - ed25519FUUU 6y ago
      Also many people who "invest" in physical bullion also invest in things like silver. A 1 oz silver eagle is basically a $20 bill. Gold can be traded down to silver if the economy is in that state. There's also 1/10 ounce coins and other things.
  - devalgo 6y ago
    >the smallest tradeable gold will be coins which are worth $1600+ each Not really accurate, you can get rounds down to 1/10 oz which are worth ~$200. In any case the USD value of a gold coin in a collapse situation is obviously irrelevant. If fiat really does collapse barter is obviously going to be the default way to trade goods and gold could easily be used as it was in the past.
- ed25519FUUU 6y ago
  I guess total collapse is something I don’t particularly worry about, since I won’t be here to worry. I think partial collapse is more likely scenario (of the two).
  - prewett 6y ago
    I would assume a Venezuela-like collapse would be what you're thinking? Would gold help much in that case? (Honestly don't know, probably depends if the person you're trying to trade the gold to believes it will be easy for them to trade the gold to someone else when the time comes)
    - devalgo 6y ago
      Can't really speak for Venezuela but lets say if currently 1 oz of gold is as valuable as a Macbook worth ~$1800 and in a hyperinflation event a Macbook costs $200,000,000 perhaps 1 oz of gold could be worth a Macbook? You would then just trade your coin for $200,000,000 and buy the Macbook. Obviously a massively simplified scenario. Perhaps there are sources out there on how people have dealt with hyperinflation?
- devalgo 6y ago
  Why wouldn't you plan for that? The only plan you'd need for the total collapse situation is to have a revolver to eat a lead sandwich with.
marcrosoft 6y ago
You don’t need a complete meltdown to profit off of gold. You just need a little pandemic and some inflation to see a spike. The trick with gold is to rebalance it when it spikes. It’s not a very good “buy and hold forever” asset class.
- regularfry 6y ago
  In a meltdown you're not looking for a profit. At least, not traditionally. You're looking to have more-than-zero.
ryandvm 6y ago
If things have gone to shit so badly that people are trading food for gold, I hope you bought guns too because very unfair people are going to be coming for your gold.
- ed25519FUUU 6y ago
  I honestly don’t know of anyone who owns physical gold who doesn’t also own a firearm for personal defense.
hellisothers 6y ago
I mean, in world where you’re trying to trade gold for food gold is a “fiat” currency as well. It has no intrinsic value and if we’re struggling to get food and water I’m not going to want to accept anything for my food except strict bartering. If you’re buying gold for the end of the world you’d be better off buying cigarettes and tiny bottles of booze.
- wutbrodo 6y ago
  Shotgun shells and cans of beans
- devalgo 6y ago
  Not sure that makes sense? Gold's value was typically based on scarcity and it's multi-millennial status as a thing of value? Why else would much of the world have based their currency on gold itself?
- thephyber 6y ago
  Gold isn't a "fiat" currency. It's a commodity that acts as a store of value. A fiat is paper which is asserted to have a specific value (likely unenforceable in a post-apocalyptic world). A commodity has a value because that's what the market will bear. Gold does have intrinsic value. It's used for electronics plating and for jewelry. Other precious metals can augment gold as commodities, each having different intrinsic values. An example of a metal which might have no intrinsic value in a post-apocalyptic world is platinum or palladium, which are primarily used as catalysts for emissions equipment on cars (no refined petrol => no driving => no need for platinum/palladium). I think the statement about cigarettes and booze is correct (as well as toilet paper and ammo), except they have different lifespans and durabilities. Also, consumables will get more rare as time goes on (like dollar bills that erode, tear, burn, or are lost), whereas precious metals may keep in-tact.
  - Apocryphon 6y ago
    Would a post-apocalyptic world really care about electrical conductors and crafting new jewelry, though? It feels like everyone is making assumptions about what people would want in such a world.
Aunche 6y ago
Even the tiniest gold coin costs over $200. For bartering, silver, Mountain House, and ammunition make much more sense to hoard.
- devalgo 6y ago
  Probably a mistake to assume the USD value of something is relevant in a collapse situation. As you said ammo could end up being far more valuable that it currently is. Similarly Gold's utility as a way to transfer value could make it much more "valuable" in that situation.
- Tempest1981 6y ago
  $80 for a 1 gram coin https://www.apmex.com/product/201564/2020-1-gram-gold-maple-leaf-maplegram-25-in-assay https://www.apmex.com/product/201564/2020-1-gram-gold-maple-...
  - sudosysgen 6y ago
    Do you have an idea just how tiny 1 gram of gold is? It really isn't practical for bartering.
    - Tempest1981 6y ago
      Yep, tiny, diameter is 8mm
      - sudosysgen 6y ago
        It has a diameter of 8mm and a thickness of "yes". It's incredibly fragile, too. Doesn't make for a good bartering coin.
fatbird 6y ago
In the Argentinian collapse, many preppers found their gold coins useless to trade. No one would give them anything close to fair value for it because no black market seller was able to assay it to verify that it's real gold. Junk gold like jewelry is what really moved, and preppers switched to hoarding rings and necklaces and whatnot.
- saganus 6y ago
  Interesting insight. I always thought gold/silver coins would be more useful than jewelry. I mean, how can you verify if a ring or necklace is actual gold, but not be able to verify a coin? I guess using the age-old method of density perhaps? do you know what did process to exchange jewelry looked like?
  - fatbird 6y ago
    I think it's more that a ring or necklace is more easily scratch tested for hardness, harder to counterfeit, and less valuable individually. If I show up with a gold krugerrand (1oz, approx. $1,800 at today's prices), expecting to get that value or even half, you're not going to give me that value without somehow testing it. A basic density test involves both scales and beaker with water for volume--who's going to carry that around in the black market where others are trading things at DVD scale prices? If I have a bunch of gold and silver wedding bands in a ziploc, though, they're the equivalent of loose change and the risk calculation is different, especially since gold jewelry is almost as common pre-collapse cash. The lesson I took is that a pure gold economy depends upon a level of infrastructure that just isn't present in economic collapse conditions. At best you're holding something that will retain value after things become normal again.
    - saganus 6y ago
      Makes sense. I guess this is one of those things that sound good 'on paper' , but after deeper analysis it's not so straight forward. Like others said, it's probably easier to trade toilet paper, cans of food or cigarettes than ounces of gold.
milesvp 6y ago
One of the threads I read maybe a decade ago about Argentina’s financial collapse at the time, was that in hind sight they’d wished they’d bought gold and made adulterated rings out of it. There was a lot of bartering, and most gold jewelry was trading under the assuption it was the most common karet (14?) by weight, and having some rings at a slightly lesser amount (or even the same) would have been way easier than trying to trade pure gold. I don’t have a sense for how bad things need to get before making your own rings becomes a viable hedge, but I don’t think the US is quite there yet.

harambae 6y ago

If things really get that bad (and I don't think they will) you could probably trade ammunition for food as well. It also lasts a very long time (when stored properly) and arguably has more of an intrinsic use than gold. There's a significant resale overhead to gold. Who's to say it's not tungsten somewhere in the middle? Are you going to microprobe the whole thing in the post-apocalyptic hellscape?

whatshisface 6y ago

Expecting that you'll be able to trade gold for food is assuming that the state after the collapse will fall into a very narrow band of "collapsed enough that the financial system is gone" and "not so collapsed that the food supply is gone." You might even call it... the Goldilocks zone. ;)

ogre_codes 6y ago
And for that matter, assumes you will be able to find safe places to trade gold for anything. Unless we go back to a gold-rush style economy where there are scales all over the place you can trade gold by the gram, the smallest tradeable gold will be coins which are worth $1600+ each. Try taking that to the local grocery store.
- secondcoming 6y ago
  Half Sovereigns are ~$300 https://www.atsbullion.com/gold-half-sovereign-coins/ https://www.atsbullion.com/gold-half-sovereign-coins/
  - ed25519FUUU 6y ago
    Also many people who "invest" in physical bullion also invest in things like silver. A 1 oz silver eagle is basically a $20 bill. Gold can be traded down to silver if the economy is in that state. There's also 1/10 ounce coins and other things.
- devalgo 6y ago
  >the smallest tradeable gold will be coins which are worth $1600+ each Not really accurate, you can get rounds down to 1/10 oz which are worth ~$200. In any case the USD value of a gold coin in a collapse situation is obviously irrelevant. If fiat really does collapse barter is obviously going to be the default way to trade goods and gold could easily be used as it was in the past.
ed25519FUUU 6y ago
I guess total collapse is something I don’t particularly worry about, since I won’t be here to worry. I think partial collapse is more likely scenario (of the two).
- prewett 6y ago
  I would assume a Venezuela-like collapse would be what you're thinking? Would gold help much in that case? (Honestly don't know, probably depends if the person you're trying to trade the gold to believes it will be easy for them to trade the gold to someone else when the time comes)
  - devalgo 6y ago
    Can't really speak for Venezuela but lets say if currently 1 oz of gold is as valuable as a Macbook worth ~$1800 and in a hyperinflation event a Macbook costs $200,000,000 perhaps 1 oz of gold could be worth a Macbook? You would then just trade your coin for $200,000,000 and buy the Macbook. Obviously a massively simplified scenario. Perhaps there are sources out there on how people have dealt with hyperinflation?
devalgo 6y ago
Why wouldn't you plan for that? The only plan you'd need for the total collapse situation is to have a revolver to eat a lead sandwich with.

marcrosoft 6y ago

You don’t need a complete meltdown to profit off of gold. You just need a little pandemic and some inflation to see a spike. The trick with gold is to rebalance it when it spikes. It’s not a very good “buy and hold forever” asset class.

regularfry 6y ago
In a meltdown you're not looking for a profit. At least, not traditionally. You're looking to have more-than-zero.

ryandvm 6y ago

If things have gone to shit so badly that people are trading food for gold, I hope you bought guns too because very unfair people are going to be coming for your gold.

ed25519FUUU 6y ago
I honestly don’t know of anyone who owns physical gold who doesn’t also own a firearm for personal defense.

hellisothers 6y ago

I mean, in world where you’re trying to trade gold for food gold is a “fiat” currency as well. It has no intrinsic value and if we’re struggling to get food and water I’m not going to want to accept anything for my food except strict bartering. If you’re buying gold for the end of the world you’d be better off buying cigarettes and tiny bottles of booze.

wutbrodo 6y ago
Shotgun shells and cans of beans
devalgo 6y ago
Not sure that makes sense? Gold's value was typically based on scarcity and it's multi-millennial status as a thing of value? Why else would much of the world have based their currency on gold itself?
thephyber 6y ago
Gold isn't a "fiat" currency. It's a commodity that acts as a store of value. A fiat is paper which is asserted to have a specific value (likely unenforceable in a post-apocalyptic world). A commodity has a value because that's what the market will bear. Gold does have intrinsic value. It's used for electronics plating and for jewelry. Other precious metals can augment gold as commodities, each having different intrinsic values. An example of a metal which might have no intrinsic value in a post-apocalyptic world is platinum or palladium, which are primarily used as catalysts for emissions equipment on cars (no refined petrol => no driving => no need for platinum/palladium). I think the statement about cigarettes and booze is correct (as well as toilet paper and ammo), except they have different lifespans and durabilities. Also, consumables will get more rare as time goes on (like dollar bills that erode, tear, burn, or are lost), whereas precious metals may keep in-tact.
- Apocryphon 6y ago
  Would a post-apocalyptic world really care about electrical conductors and crafting new jewelry, though? It feels like everyone is making assumptions about what people would want in such a world.

Aunche 6y ago

Even the tiniest gold coin costs over $200. For bartering, silver, Mountain House, and ammunition make much more sense to hoard.

devalgo 6y ago
Probably a mistake to assume the USD value of something is relevant in a collapse situation. As you said ammo could end up being far more valuable that it currently is. Similarly Gold's utility as a way to transfer value could make it much more "valuable" in that situation.
Tempest1981 6y ago
$80 for a 1 gram coin https://www.apmex.com/product/201564/2020-1-gram-gold-maple-leaf-maplegram-25-in-assay https://www.apmex.com/product/201564/2020-1-gram-gold-maple-...
- sudosysgen 6y ago
  Do you have an idea just how tiny 1 gram of gold is? It really isn't practical for bartering.
  - Tempest1981 6y ago
    Yep, tiny, diameter is 8mm
    - sudosysgen 6y ago
      It has a diameter of 8mm and a thickness of "yes". It's incredibly fragile, too. Doesn't make for a good bartering coin.

fatbird 6y ago

In the Argentinian collapse, many preppers found their gold coins useless to trade. No one would give them anything close to fair value for it because no black market seller was able to assay it to verify that it's real gold. Junk gold like jewelry is what really moved, and preppers switched to hoarding rings and necklaces and whatnot.

saganus 6y ago
Interesting insight. I always thought gold/silver coins would be more useful than jewelry. I mean, how can you verify if a ring or necklace is actual gold, but not be able to verify a coin? I guess using the age-old method of density perhaps? do you know what did process to exchange jewelry looked like?
- fatbird 6y ago
  I think it's more that a ring or necklace is more easily scratch tested for hardness, harder to counterfeit, and less valuable individually. If I show up with a gold krugerrand (1oz, approx. $1,800 at today's prices), expecting to get that value or even half, you're not going to give me that value without somehow testing it. A basic density test involves both scales and beaker with water for volume--who's going to carry that around in the black market where others are trading things at DVD scale prices? If I have a bunch of gold and silver wedding bands in a ziploc, though, they're the equivalent of loose change and the risk calculation is different, especially since gold jewelry is almost as common pre-collapse cash. The lesson I took is that a pure gold economy depends upon a level of infrastructure that just isn't present in economic collapse conditions. At best you're holding something that will retain value after things become normal again.
  - saganus 6y ago
    Makes sense. I guess this is one of those things that sound good 'on paper' , but after deeper analysis it's not so straight forward. Like others said, it's probably easier to trade toilet paper, cans of food or cigarettes than ounces of gold.

milesvp 6y ago

One of the threads I read maybe a decade ago about Argentina’s financial collapse at the time, was that in hind sight they’d wished they’d bought gold and made adulterated rings out of it. There was a lot of bartering, and most gold jewelry was trading under the assuption it was the most common karet (14?) by weight, and having some rings at a slightly lesser amount (or even the same) would have been way easier than trying to trade pure gold. I don’t have a sense for how bad things need to get before making your own rings becomes a viable hedge, but I don’t think the US is quite there yet.