Author of The Dark Secrets of SHTF Survival and the online course SHTF Survival Boot Camp
Last week, I read with interest the explanation for preppers about gold and silver. It was very informative and brought back some memories of my experience with precious metals, which I thought I would share with you.
I am aware that with this article, I might kill (or at least threaten) a few “sacred cows” but from time to time I do write similar articles about this topic. There are a lot of misconceptions about the usage of precious metals after a collapse.
I am aware too that my experience was my experience and that in some of your future experiences things might work differently when it comes to precious metals, but still read the article and think about it.
Precious metals are valuable, but not in the way you may think.
What do you mean by “collapse?”
There are maybe differences in what one person might imagine when they think of “collapse” and what I imagine by hearing that word. Even today, there are systems in the world that are actually “collapsed” – but in reality, those systems are still functioning; they are just functioning in a horrible way. They are on the brink of the collapse but they are still functioning.
To an average person from modern western society, it looks like everything collapsed, to the person that lives in that mess it might be a hard time but it is definitely not full-on collapse.
For example, I currently live in a society and system that you might describe like “SHTF”. There are car bombs, political murders, 50% unemployment, terrorism, corruption on every level, poverty, organized crime, an immigrant crisis, the constant threat of new war, etc., etc.
Some people say that the SHTF is here already, but it is not a real collapse. There is a system still there, it is a crooked, corrupted, and completely wrong system, but it is there.
I consider it a real collapse (SHTF) situation when (for whatever reason) the system actually collapsed, and trucks (with goods) have completely stopped moving.
It does not have to necessarily be a warlike I experienced. There can be a whole lot of other situation that can produce that kind of prolonged collapse.
A serious weather event, a natural disaster, an EMP, an economic disaster event, etc.
When I share my advice about the usage of precious metals I am thinking about this kind of event.
In the middle of the event, you want things with real value.
When the collapse happens, basically you have two options (when it comes to precious metals) either to give them up for food (or ammo, water filters, antibiotics or whatever) at very low rates (bad rates for you) or to wait for some kind of system to return and then use precious metals (at good exchange rates).
It is a very simplified explanation but it is like that.
In a real collapse, people want to trade stuff that they can use immediately, and the reason for that is surprisingly simple – it is because they cannot obtain stuff for immediate use in the regular way, like buying from shops and markets, and they still have to eat, have water, medicines, and similar.
People want stuff that has real, immediate value and use.
So as a result in real collapse stuff that can get you through that collapse is usually not precious metals. It is stuff that has immediate use and value.
Again, those precious metals have good (or even great) value when some kind of system returns, but it is usually later, and you need other things of immediate use and value to wait to for that moment.
There are always exceptions.
Of course, there are exceptions to this above, but those are not rules, those are exceptions.
There were people who had enough power (force) to have plenty of resources, so they simply traded those resources and took precious metals from people at really really good rates (for them, not for people). Then they hid those PMs, protected them with enough force, and they waited for the system to return. (for war to stop).
And yes, they are rich people today. They had immediately important resources at a good moment, and they had enough to sell.
I sold some jewelry at that time to people like that. I sold golden necklaces for a couple of cans of food. In normal times one of those necklaces would be worth maybe 1000 cans of food, but those were not normal times. The guy had food, and i did not. I had precious metals. He could set rate – I could not.
So as an exception, yes, you can have, and even deal (trade, collect)precious metals when everything collapses and wait for a better time and better rate, but you need organization for that.
But if your whole prepping plan is having PMs and hoping that when the SHTF some kind of trade system will jump in where you are gonna buy stuff with your silver coins like you do with money today, then your planning is wrong.
At some stages, precious metals can work well.
There are some early stages of SHTF when money is already not good, but immediately valuable things (food, ammo, meds…) have not yet jumped in as priorities.
At that time, precious metals can work for bribing, paying for small things, solving problems etc.
But even then, if you end up at some checkpoint where 3 guys are standing guard and you want to offer them a bribe in order to pass the checkpoint what are you gonna offer them?
A collectible coin or your wife’s golden ring? You have to be careful. Even then, have things that are ordinary. You want nothing that needs to be checked very hard or nothing that will make them suspect you have a lot of those things with you.
At that stage, you are best off to trade usual everyday jewelry, cheaper golden or silver rings, necklaces, etc.
I am not actually against having precious metals, but I am against the way this is presented in the survival realm today.
Precious metals have their place in the world of prepping, but they will not solve your most immediate problems, or at least it will not solve it in a way that many preppers imagine it.
On the list of items that I want to have when SHTF again, precious metals are there, but a long way down on the list of priorities.
Selco survived the Balkan war of the 90s in a city under siege, without electricity, running water, or food distribution. He is currently accepting students for his next physical course here.
In his online works, he gives an inside view of the reality of survival under the harshest conditions. He reviews what works and what doesn’t, tells you the hard lessons he learned, and shares how he prepares today.
He never stopped learning about survival and preparedness since the war. Regardless of what happens, chances are you will never experience extreme situations as Selco did. But you have the chance to learn from him and how he faced death for months.
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Calling you out not all prepping is a shtf..gold and silver have and will always be needed..carry bullion not coins..gold and silver at pawn shops is spot trade and cash..ie no paper trail. It is a good investment against inflation. Not all your money but some around. My Jeep needed repairs gold was at close to 1800.00 years back it was credit card or 1.5 oz of gold..get the picture..I was prepared for it..oz of gold is 1100 today..silver 14 nothing is all out or all in. Nice to pay cash for repair than pay 18%interest for six months.
I like your article, Selco.
What you call “real collapse” I think of as “chaos”. Like the chaos that would exist if the whole country suffered an EMP attack and all electrical power was out.
The point of my article was to help sellers figure out what their gold, silver and other numismatic items (hence the comments on paper money) are worth before the SHTF so that when sellers go to sell it, before the SHTF, they can make an informed decision on what a fair price is. I suppose I didn’t make that clear enough. The same information would be useful to buyers, before the SHTF.
My thoughts on the value of money and precious metals to preppers are these. The first day or two after an SHTF event that results in Chaos, I think cash money will work much of the time. The cash register will probably be down, but if you offer to pay a reasonable estimate of the price of what you want to buy and “tip” the cashier then maybe the cashier will sell it to you. Day 3 and 4 silver or gold might get you what you want or more likely it may be all gone. This is assuming that people are not already stealing what they want and running out the door with it.
Gold and silver is more likely to be useful after things settle down. Like a year or two later.
Gold is most likely going be for bribery or major purchases, like a horse or cow or some such.
I agree with Selco, that if you try to trade gold, silver or jewelry after the shelves are empty you are not going to get much. However, cash, silver, jewelry and gold could be useful before the shelves are empty. I would certainly want some if I was trying to get home.
Better to buy food, water, meds, ammo, etc. BEFORE the SHTF than after.
When the SHTF, if my car is running, I likely will make a trip to my pharmacy, carrying cash, silver and gold and my get back home kit. If the car is not working, I’m going into immediate lockdown.
You know, everything really depends on which SHTF event scenario it is and how things unfold.
Your article was great just would steer to bullion instead of coins or collectable . Gold and silver is another tool. Like every thing moderation a pocket full of gold is no match for a ar or case of MREs. Chances are we wouldn’t be in a shtf. But we may lose our job banks may fail. Maybe emergency medical bill. Gold and silver are cash in hand it may be weeks before you cash out your stocks.. don’t be foolish have a few ozs of both on hand.
Keep in mind that selco (if he was in Sarajevo as I suspect) was in a blockaded city, surrounded by tanks and infantry supported by a modern country aka Serbia, where he and his compatriots were popped at by tanks, snipers, artillery, and mortar teams on a random basis. Nothing was getting in and out by truck, pipeline, etc. Outside that city it was business as usual, save for the random bomb from Bill Clinton/nato. The gangs and militia that ran Kosovo during the siege ran Kosovo before the siege and were just as evil before as after. What the siege did was to liberate them from any fetters of humanity they had left and their ture natures were revealed.
This is relatable for siege warfare of quasi – modern cities void of any sense of Christianity (as in the case of the good old USA) but filled with the spirit of islom and all its horrors even when the city wasn’t under siege) but not for when an entire country with the greatest gdp in history goes insane. Also, in shtf I think a lot of the worst predators will meet their demise quickly at the hands of patriotic Americans, but more will take their place as the cities empty into the countryside after the cities have been raped. Children, get out of the cities.
If the gov or whatever power existing at the time decides to blockade the zombies inside US cities, what selco has described here should apply very well, so the zombies should take heed, but keep in mind the zombies are being kept inside the cities to protect people who are not infected outside those cities. There will always be some form of economy, and gold and silver has always been money. Those who think they will get what they want by force during shtf will meet their opposite number who will put them and their fellows in the ground where they belong. This isn’t Kosovo, this is America.
Gold worked really well in Argentinas currency crisis and Zimbabwe inflation. Economic activity was still going, but the cash was worthless. It wasn’t ‘utter chaos’ local product was still being produced and imports were still coming in for anyone who could pay for them.
America has been doing what these countries did for quite while, but no as much as other countries, so America is a “relatively” safe haven and people are POURING their wealth into it, accelerating the demise of their own currency.
Often described as “The dry end of the Titanic”, America may be the last to get wet, but it’s well on track to get wet.
Actually, the most likely source of problems among many.
First order is not starving and whatever it takes to keep your supply…so, beans first, bullets second.
Brass is the new gold. “Money” by definition: Divisible and stores well. At least temporary high demand and [most likely] increasing rarity.
Great article SELCO.
You have re-affirmed many of my points of view concerning PMs.
But the real take away, survive whatever SHTF event you have to live through.
Could be something as short as a few days or weeks or even a month.
Based off the various reporting I have read concerning an EMP attack, or a true grid down event, best case was 4 years before the grid returns. That is best case scenario.
Worst case was 10 years.
For the current price of a oz of gold, that could buy a whole lot of other preps that your life just might depend on.
Namely food, water (or access to water), seeds, ammo, medical supplies etc.
I agree that PMs are primarily for reconstituting your life after society starts to recover. I agree PMs won’t be useful during a collapse. I’d never ever offer PM’s (coins or bullion rounds) as a bribe. The other guys would immediately assume you were carrying more on you and would attack. I agree that it would be safer to carry and offer what appears to be a woman’s personal jewelry. Actually I am told that refugees often convert their wealth into women’s jewelry to wear across borders.
Thank you Selco. I think one of the primary points that you are making and many on the comment boards don’t seem to understand, is that in your experience of a real SHTF situation, the one with the commodities got to set the price no matter how unreasonable that price might seem today. Those that had a surplus of commodities, or a supply line to replenish them AND the means to protect their supplies and trade materials are wealthy as a result of this experience. This takes organization, pre-planning, execution of strategic tactics, patience, and an awareness that the SHTF circumstance will not last forever. Endurance is key, but survival is the first priority for any person or group.
Your articles (ALL of them) are always informative and provide a great deal of insight into situations that most people have never had to deal with. Thank you for that, and please keep them coming!
Regarding precious metals and their usefulness in the type of collapse that you have described, I visualize several scenarios. They are simplistic, but only because it is very difficult to project realistic details to any of them. For example:
1. If I have no food, but I have precious metals in the form of jewelry, gold coins or bullion, I might come to you seeking to barter for food that you have. If, however, you also have no food the barter is not only pointless, I have revealed to you that I have something that may be of value to you at a future time. In other words, when neither of us has food, bartering is a useless endeavor.
2. If you have an insufficient amount of food it is unlikely that you will be willing to trade even a small portion of your stock, regardless what I am willing to pay for it. Moreover, it is unlikely that you will be willing to even admit that you have food for fear that someone will take it. Again, the barter attempt will not be successful.
3. If you are sitting on a virtual mountain of food (a warehouse, for example), but are unable to protect it, I may enlist the aid of friends and steal it. If you are able to protect it, and are willing to trade small quantities for precious metals or other useful items, then a bartering arrangement will probably be successful. I get to live for another day and you will ultimately get rich.
4. During the period of total collapse, it seems there are many items that would be much more useful for survival than PM; medicines, fuel, cold weather gear, boots and ammo, to name only a few. But even here it would be necessary to protect whatever assets you have, even if it isn’t food stocks. I can’t protect myself with a can of beans or a Krugerrand, but a rifle with full magazines will at least give me a chance.
Ultimately, what anyone has as trade goods will be depleted if the collapse lasts long enough.
no offense but gold cannot be spread on sandwich or plow a field. show someone you have gold to pay for or trade and you might have unwanted visitors as soon as the sun down to take the rest
dont want it and trafe for it
makes me a target.
The most important statement in the article IMO:
“ The guy had food, and i did not. I had precious metals. He could set rate – I could not.”
Excellent analysis. I lived many years in Iraq and in other lawless areas in which all stable economic systems had either completely collapsed, or were nearly so. What Selco says about precious metals is my experience. Yes, we could use our gold and silver to trade and barter, but in most every case, we did not have the upper hand in the deal at all. We only made someone else wealthier. In my experience, the one who has food, medicine (especially antibiotics), firearms, ammo, fuel, vehicles (that work), and who belongs to a system of strong community support, is the one with the upper hand in a big way.
I consider precious metals a re-building tool, after the SHTF, for you or your loved ones to do so. Property is another post-SHTF item to trade for assets to re-build. Land or moveable. Lots of re-building. A sawmill…. hmm.
(1)In an urban setting, how do you get rid of the dead?
(2)Serbia is not the USA. What, if anything, can we do about cannibalism?
In our large cities, with just-in-time inventory, it will happen.
It’s all about priorities, PMs are great if you have water, food, shelter and protection covered. But at today’s price point for gold I can get a lot of food, ammo or training. A lot of people overlook getting training it weighs nothing and can be reused over and over. 2ozs of gold would buy a set of night vision which is also a game changer.