7 ms·

I mean isn't that the reason preppers love gold/silver bullion?

by posnet 5y ago

lazide 5y ago
Yup, though the minimum ‘buy in’ per unit without getting raked over the coals with high spread products is too high for many people. If you’re trying to set aside $20/wk, silver is terrible and good luck with Gold.
dylan604 5y ago
i've never understood how this would work in these doomsday scenarios. are people going to walk around with scales to weigh the gold for every transaction as well as test the purity of the gold? are they going to mint their own coins? I just don't see how it's supposed to work
- deleted 5y ago
  [deleted]
- XorNot 5y ago
  Modern banking was also basically invented because of this very problem - gold was inconvenient so you had gold coins with insigna's which promised a standard weight of gold and could be reasonably trusted due to being hard to forge. Which gave way to IOUs from gold smiths, since carrying large amounts of coins was still hard. Which, well, everyone knows the rest.
  - dylan604 5y ago
    Right, so again, what do these people think they are solving? There's plenty of logic flaws with the doomsday preppers, but returning to the gold economy is just where I draw the straw. Sure, store all the food, guns/ammo, fuel, water, etc you can, but if the world is that screwed up, we've all seen the movies on how well best laid plans workout.
    - deleted 5y ago
      [deleted]
    - lazide 5y ago
      See my comment above. It doesn’t have to make sense in our current environment for people to do it. Doing this kind of thing has meant their ancestors survived crazy insane disasters that most others did not, so they are going to keep doing it to some extent no matter what. Think of it as humanities extra parity bits. Most of the time they’re useless, until they’re the only reason we’re still here.
- rsj_hn 5y ago
  I think the idea is that gold is a universally desired good that can be exchange for money or anything of value in any situation or place. So if you decide to flee the country, five pounds of gold is $150K and can easily be carried in a small backpack. Let's say you keep it in 1 troy oz pieces, so you have 80 of them worth about $1800 each. You can go to any nation on earth, and whatever currency they have, they will be happy to sell it to you for gold. Yes, only in $1800 pieces. That's fine, you can exchange it for whatever local currency is being used as you need it. You can do this anonymously and privately. You don't need to worry about whether the US dollar has collapsed. Gold does go up and down, but it never goes to zero, and tends to do well in crisis situations and maintain value over the long term. It is not - or shouldn't be viewed as -- an "investment", it's insurance. It costs money. Moreover even if you do not flee the country, having assets that you possess - true bearer assets -- is superior than assets others hold for you in a custodial account. How secure is your 401K? Secure until congress passes a law to take some of it. How secure is your bank account? It is as secure as someone who can convince the bank to freeze your account or close your account. So having a bit of gold or cash as a type of hedge for unlikely events makes sense to a lot of people. You have to keep in mind that for a household living in Silesia, between 1880 and 2000, they would have lived through one hyperinflation, two world wars, two revolutions and three uprisings, and four foreign invasions. They would have been ruled by Prussia, Poland, Nazi Germany, Soviet-controlled Poland, finally free Poland. Each of these had their own currency regimes and currency reforms. That household would have been well off having a bit of gold tucked away. They would have been able to trade some of it for food during the Weimar collapse, and to transport some wealth through the dark days of communism -- maybe even bribing someone to let them escape the country with something more useful that worthless zlotys in whichever nation they landed.
  - dylan604 5y ago
    I understand the rational thinking of gold exchanges. You missed the detail about this being confusion on preppers. If the world has gone to shit (nuclear war, zombies, etc), then gold just isn't that useful. If it was silver, you could at least melt it down and kill the vampires with it. You're attempting to use logic in a place where there is none.
Spooky23 5y ago
Those are the folks schnookered by companies that sell gold. Aka suckers. The “real” gold and silver people use it to avoid taxation. The high spreads and illiquidity are less than what you owe the tax guy or your ex-wife.
- ptero 5y ago
  I don't see either high spreads or illiquidity. At least in the US the spread from reputable dealers is under 1% for bullion; slightly more for coins. It is certainly a feasible (and, in current low interest rate scenario, inexpensive) hedge against catastrophic economic problems.
  - christophilus 5y ago
    Where do you find spreads that low? They’re like 10-20% where I am.
    - ptero 5y ago
      Using reputable dealers that deliver orders placed online. Strange as it sounds, it is, IMO, one of the better and safer (definitely low commission) ways to get gold. BD Bullion, APMEX are good ones. I did not check very recently, but when I did the difference with spot price were under 1% (slightly higher for APMEX, slightly lower for BD). A friend in Australia mentioned the same ballpark, 1-1.5% spread (combined, not each way). 10-20% is a highway robbery!! An important caveat: this only applies to reasonably large orders, 1 oz or larger. You cannot buy $100 of gold with 1% spread.
      - ptero 5y ago
        I stand corrected -- currently, the difference with spot price is about 2% each way. Lower than 10-20%, but much higher than ~0.5% I remember earlier. I suspect this is due to recent gold price volatility, but not sure.
  - lazide 5y ago
    The only stuff with that kind of spread are 100oz silver bars or 1oz gold coins, all of which are well outside of feasible for $20/wk folks (unless they are willing and able to save for 2 yrs per coin anyway)

I mean isn't that the reason preppers love gold/silver bullion?

by posnet 5y ago

I mean isn't that the reason preppers love gold/silver bullion?

Yup, though the minimum ‘buy in’ per unit without getting raked over the coals with high spread products is too high for many people. If you’re trying to set aside $20/wk, silver is terrible and good luck with Gold.

dylan604 5y ago

i've never understood how this would work in these doomsday scenarios. are people going to walk around with scales to weigh the gold for every transaction as well as test the purity of the gold? are they going to mint their own coins? I just don't see how it's supposed to work

deleted 5y ago
[deleted]
XorNot 5y ago
Modern banking was also basically invented because of this very problem - gold was inconvenient so you had gold coins with insigna's which promised a standard weight of gold and could be reasonably trusted due to being hard to forge. Which gave way to IOUs from gold smiths, since carrying large amounts of coins was still hard. Which, well, everyone knows the rest.
- dylan604 5y ago
  Right, so again, what do these people think they are solving? There's plenty of logic flaws with the doomsday preppers, but returning to the gold economy is just where I draw the straw. Sure, store all the food, guns/ammo, fuel, water, etc you can, but if the world is that screwed up, we've all seen the movies on how well best laid plans workout.
  - deleted 5y ago
    [deleted]
  - lazide 5y ago
    See my comment above. It doesn’t have to make sense in our current environment for people to do it. Doing this kind of thing has meant their ancestors survived crazy insane disasters that most others did not, so they are going to keep doing it to some extent no matter what. Think of it as humanities extra parity bits. Most of the time they’re useless, until they’re the only reason we’re still here.
rsj_hn 5y ago
I think the idea is that gold is a universally desired good that can be exchange for money or anything of value in any situation or place. So if you decide to flee the country, five pounds of gold is $150K and can easily be carried in a small backpack. Let's say you keep it in 1 troy oz pieces, so you have 80 of them worth about $1800 each. You can go to any nation on earth, and whatever currency they have, they will be happy to sell it to you for gold. Yes, only in $1800 pieces. That's fine, you can exchange it for whatever local currency is being used as you need it. You can do this anonymously and privately. You don't need to worry about whether the US dollar has collapsed. Gold does go up and down, but it never goes to zero, and tends to do well in crisis situations and maintain value over the long term. It is not - or shouldn't be viewed as -- an "investment", it's insurance. It costs money. Moreover even if you do not flee the country, having assets that you possess - true bearer assets -- is superior than assets others hold for you in a custodial account. How secure is your 401K? Secure until congress passes a law to take some of it. How secure is your bank account? It is as secure as someone who can convince the bank to freeze your account or close your account. So having a bit of gold or cash as a type of hedge for unlikely events makes sense to a lot of people. You have to keep in mind that for a household living in Silesia, between 1880 and 2000, they would have lived through one hyperinflation, two world wars, two revolutions and three uprisings, and four foreign invasions. They would have been ruled by Prussia, Poland, Nazi Germany, Soviet-controlled Poland, finally free Poland. Each of these had their own currency regimes and currency reforms. That household would have been well off having a bit of gold tucked away. They would have been able to trade some of it for food during the Weimar collapse, and to transport some wealth through the dark days of communism -- maybe even bribing someone to let them escape the country with something more useful that worthless zlotys in whichever nation they landed.
- dylan604 5y ago
  I understand the rational thinking of gold exchanges. You missed the detail about this being confusion on preppers. If the world has gone to shit (nuclear war, zombies, etc), then gold just isn't that useful. If it was silver, you could at least melt it down and kill the vampires with it. You're attempting to use logic in a place where there is none.

Spooky23 5y ago

Those are the folks schnookered by companies that sell gold. Aka suckers. The “real” gold and silver people use it to avoid taxation. The high spreads and illiquidity are less than what you owe the tax guy or your ex-wife.

ptero 5y ago
I don't see either high spreads or illiquidity. At least in the US the spread from reputable dealers is under 1% for bullion; slightly more for coins. It is certainly a feasible (and, in current low interest rate scenario, inexpensive) hedge against catastrophic economic problems.
- christophilus 5y ago
  Where do you find spreads that low? They’re like 10-20% where I am.
  - ptero 5y ago
    Using reputable dealers that deliver orders placed online. Strange as it sounds, it is, IMO, one of the better and safer (definitely low commission) ways to get gold. BD Bullion, APMEX are good ones. I did not check very recently, but when I did the difference with spot price were under 1% (slightly higher for APMEX, slightly lower for BD). A friend in Australia mentioned the same ballpark, 1-1.5% spread (combined, not each way). 10-20% is a highway robbery!! An important caveat: this only applies to reasonably large orders, 1 oz or larger. You cannot buy $100 of gold with 1% spread.
    - ptero 5y ago
      I stand corrected -- currently, the difference with spot price is about 2% each way. Lower than 10-20%, but much higher than ~0.5% I remember earlier. I suspect this is due to recent gold price volatility, but not sure.
- lazide 5y ago
  The only stuff with that kind of spread are 100oz silver bars or 1oz gold coins, all of which are well outside of feasible for $20/wk folks (unless they are willing and able to save for 2 yrs per coin anyway)