Money and negotiable valuables in an emergency

 

Aesop, writing at Raconteur Report, emphasizes the necessity of money as a fundamental element of being prepared for whatever life might throw at you.  In general, I agree with him, although I differ on some specifics.

Money.

Nota bene we did not say "cash". Cash is nice, but it's not money. In fact, it's explicitly something commonly accepted by people AS IF IT WERE money, thus not money, per se.

Gold is money. Silver is money. Other precious metals (nickel, copper, platinum, etc.) can be money. US dollars (nor Euros, British pounds, Swiss francs, Japanese yen, etc.) are NOT money, and haven't been since they stopped being readily exchangeable for actual specie.

Other things (jewels, bonds, stocks) are worth money, but they aren't money either. Nobody prices gas or milk in gallons per carat, for instance.

So as you're stocking up on canned goods (both in #10 cans, and in olive drab ones), and storing water, fuel, and all sorts of consumables from pins to nails to bolts to lumber products - you are working on that, right? - make sure you're storing money. And cash. In a cache. Or ten.

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So part of your efforts should include adding "junk" silver (i.e. U.S. coinage prior to 1965, which is 90% silver by content), and gold (ideally in fractional ounce denominations - 1/10th oz., 1/4 oz., etc. - as coins worth $1800 and up for full ounces are a bit too concentrated for everyday items) to your stockpile(s). I made that plural, because you shouldn't keep all your nest eggs in one basket. In any sense.

And, as every devotee of Dave Ramsay knows, have a cash reserve.

Six months' gross income is a worthy goal. It gives you options, not least of which is "F**k You" money, to cope with a bad boss, a bad situation, or a bad location. Anything you can't solve with six months' cash is pretty much catastrophic levels of problem. Probably 90% of life's problems are readily solved by a six month float.

Any or all of this should be stored, safely and securely, and not in places or institutions that do not have your best interests in mind. IOW, safety deposit boxes suck. Try getting into yours after a disaster, or a bank run. Or after a tax lien. [Hint: It ain't happening. And you're therefore screwed. Possibly terminally. Think about that.]

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So your emergency cash stash should be ready to hand. It's your bugout bankroll, or most of it. Cash will likely solve most of your small problems, and still be accepted (howsoever briefly) in major disturbances to society. IOW, long enough for you to get from current home to safety, if they suddenly cease being one and the same place.

The melt value on a roll of silver dimes is currently about $100, btw. A shade under $2/@, at the moment. In 50 years, it will still be 50 pieces of 90% silver. The $100 in a crisp Benjamin will not be nearly as valuable in 50 years' time, or even in 20 years. Bet on that reality. Ignore that truth to your own financial peril.

There's more at the link.

I did a little calculating the other day.  I bought our (very small) stock of silver coins (US Silver Eagles, Canadian Silver Maples, and Austrian Wiener Philharmoniker, all containing 1 oz. of pure silver) in 2015.  Looking at their price, then and now, they've appreciated by something like 50% - which, when you think about it, is just about the overall rate of US inflation (real inflation, not government statistics) since I bought them.  In other words, they really have been a store of value for us, retaining the value of the dollars with which we bought them.  They're a worthwhile hedge against inflation.

I'm not sure about Aesop's advice to buy pre-1965 US silver coins for their 90% silver content.  There are an awful lot of fakes out there, including well-worn coins where the year mark has simply been re-stamped.  Some are obvious, detectable with the naked eye, while others are not.  Furthermore, there are people who've made their own molds for them, pre-worn, and are casting coins that contain no silver at all.  I probably won't have time to figure them out in an emergency situation, so I won't be accepting them in exchange for anything I have to sell.  Brand-new 1 oz. silver rounds, on the other hand, from a reputable source (complete with dated sales receipt) and bearing a reputable "brand" . . . that's another story.

I agree with Aesop and others about the utility of a cash reserve equivalent to several months' expenditure.  Sadly, we don't have that, because we simply can't afford it on our limited income.  We have a small cash reserve, and I'd very much like to expand it, but right now that simply isn't possible.  As I get back to publishing books (five are in the pipeline right now!), I hope I'll earn enough to add to it, one book at a time.  Meanwhile, even a few hundred dollars tucked away somewhere safe can be a life-saver.  According to CNBC, "Fewer than 4 in 10 people have enough savings to pay for an unexpected $1,000 expense in cash.  The rest would have to borrow, use a credit card or take out a personal loan."  I think it's a worthwhile goal for all of us to try to accumulate at least that much in an emergency reserve, as a starting point.

A mistake many "preppers" make is that they put all their resources into accumulating food, essential supplies, weapons, ammunition, etc.  I agree, all those things have their place in our preparations . . . but you can't eat toilet paper, or ammunition, or an AR-15.  If nobody wants your goods in trade (or it's too dangerous, in [say] an urban unrest situation, to lay them out on a table at your local market to offer them for trade), cash or negotiable valuables like precious metal coins are going to be king.

Peter