What sparked the query was a nagging question that finally surfaced: "Why do people buy gold shares?" I’ve seen them advertised for several years and didn’t pay much attention. The ads are getting more pervasive, and I finally spent a minute thinking about them. Gold is one thing, gold shares another. You can hide gold in the backyard if you like and it’ll have some value in almost all scenarios, but gold shares have no value unless there’s still a functioning banking system and the government hasn’t gone all Order 6102 on us.
Governments suffer the besetting temptation to seize things that don’t belong to them, and bullion stock in gold shares firms beckons. Thus gold shares are only really valuable until the government starts hurting for income or starts soak-the-rich theater (only against the non-cronies, of course).
Even plain old gold isn’t always as useful as advertised. Imagine—TSHTF and you’ve got yourself a pantry of canned goods and trading booze, and a couple of Krugerrands. You need a new axe handle and some nails, so you go to what’s left of the lumberyard to buy some. What are you going to get in change? Do they even carry that much change? You need a bank to get full use of your gold, and some sort of currency system.
The spectrum I had in mind was more along the lines of the degree of preparedness and how major an upheaval you expect.
For the moment ignore the folks who don’t prepare.
At the near end you have those of us who keep a week’s worth of canned goods on hand and have an emergency kit available. This is "dual use" preparedness: good for when a blizzard shuts down the roads and also good for camping trips. We have a lot more of the latter than the former, fortunately. And no gold, so don’t bother burglarizing the place, OK?
At the far end you have the fortress farm with a jack of all trades who has ammo for a hundred years. You hope he never gets appendicitis.
Scenarios abound, of course. What sort of assumptions do you make? Will there still be a flow of fertilizer and pesticides at prices farmers can afford, and fuel for food transport? I can’t easily find a listing of fertilizer plants, but it isn’t hard to come up with scenarios in which the number is regulated back and the price turns unaffordable; and in a major downturn there might not be any way to build new ones in time. That would be very bad.
If there are jobs but not good ones, with just enough food to keep body and soul together, then knowing how to make do and having neighbors you can trust is the largest part of preparation. And being adaptable. We’ve been there before—most of the world lives like that.
If you just think this will be a 10-year downturn and we’ll be back on our feet again afterwards, then it makes sense to invest in business property and congressmen, and try to hang on. If you think cities are headed for Detroit-ization, business property is the last thing you need.
I’ve already written what I suspect about the zombie apocalypse.
4 comments:
Good post. Whenever I think about gold as the supposed ultimate hedge against end-of-the-world times, I can't help but be reminded of that old black & white Twlight Zone episode, The "Rip Van Winkle Caper." Thieves robbed a shipment of gold bars and then sealed themselves in suspended animation chambers only to be brought back in 100 years when no one is looking for them. Of course, with the Twlight Zone twist in those 100 years mankind found a way to create gold, so it became worthless. Joke is on them. http://www.youtube.com/watch?v=dvmvu6GxqSg
I browsed a couple of sites before my eyes glazed over, and the only thing I could think of after looking over the offerings of the "ultra-prepared" vendors was http://www.biblegateway.com/passage/?search=Luke+12%3A16-21&version=NIV.
We are in no way prepared for the apocalyptic failure of markets and long-distance transport. Organic farming is a hobby with us, though, so we try to make the agricultural cycle here as self-sustaining as possible. We rely on others for our cow poop, which we bring in by the truckload whenever we have a few hundred dollars to spare. If TSHTF, we'll collect human waste from our neighbors, which we know how to compost safely even if we don't yet present that kind of challenge to our county eco-agents. We have chickens, including roosters. I suspect the out-of-control wild pig population around here would drop sharply, along with the raccoons. My husband and neighbors are all proficient hunters and wild-game processors. We've been learning old-fashioned food-preservation techniques such as naturally fermented dill pickles and yogurt. It's my ambition to learn to make cheese. All of these things would make good barter material.
But, as you say, appendicitis. And root canals. I haven't any illusions about retiring behind our (not very defensible) fence and being self-sufficient. We do have neighbors who have this kind of thing on their minds a bit, and who are interested in teaming up.
We're city dwellers, on a 90-foot half duplex lot. We'd be hard put to raise enough food to make more than a modest dent in the food budget.
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