I always laugh when people say that they have gold in case the economy collapses.I always wonder, if the economy collapses and there is a general downfall of the country WHO can take their gold as payment of anything?
I mean, can you go to the market and tell the 18-year-old clerk at the cash register that your little speck of gold is worth $100? And if he takes it, how does HE exchange it? And how do you get change back if you don’t trust the money in society?
I think if society collapses gold won’t do you much good. A GUN on the other hand, is FAR more useful in that case!
>>>I always wonder, if the economy collapses and there is a general downfall of the country WHO can take their gold as payment of anything?
If you read their stories, the escaping Vietnamese boat people used gold to buy their passage out of a Communist dictatorship. It might not work for small purchases like buying bread and clean water on a daily basis, and it may not be very portable. It also requires the owner to know too much about the purity of the metals involved.
It would be interesting if one calculated the difference from 1968 until 2008 of the change in gold prices with no taxes (assume nothing was sold), less stated CPI... to the receipt of interest on the same amount of money at the quarterly prevailing 1 Year Treasury rates, less annual tax payments on the interest, less stated CPI for those years.
Also, if you want to eliminate the risk of holding gold (good idea), then you can simply buy one of the funds or ETFs that invest in gold indexes or diversified gold stocks and futures contracts. This would be the preferred way to go if you only predict high inflation and not total breakdown. If you are forecasting a lower dollar, perhaps certain US manufacturing companies that sell overseas would be a better bet. They’re having a half-off sale right now! (after factoring in our lower USD).
Just a thought, but instead of watching the price of gold, I track the price per bullet of 7.62mm NATO ball ammo.
And boy has it gone up in the last four years!
As an old Cold Warrior, I remember fallout shelters and Conelrad. At the time, one author suggested using .22 long rifle as a form of currency. Another wrote,
“The day may come, in the aftermath of nuclear war, when a pound of tobacco is worth more than a pound of gold.”