Currency Issues and Spending

[k0xxx]

I know alot of people that are gold bugs. I think that is kind of silly if you really think the whole world is going to come crashing down. You can't eat gold, can't even wipe your behaind with it (paper cash will still work for that! LOL!!!)

I am stocking food and things that I think might be hard to get but are storable. My friend in Iceland told me top commodities in the first couple of months after their currency collapsed was booze, feminine hygiene supplies, coffee and cigarettes. In Iceland ammo was never an issue, but I suspect it will be here.

Owning gold and silver is a way to store some of your wealth through a currency crisis. It's not, at least for me, a matter of bartering with it. If a currency collapse were to occur, the value of precious metals does not change, but rather the value of the currency plummets. Any savings that were held in the old currency becomes worthless. Once things have stabilized and a new currency is being used, then precious metals could be converted back to whatever money is circulating.

Back in the 1930's a lot of rural people had their farms and could survive quite nicely even though they had no money. The problem became that nobody had money to pay property taxes, and quite a few ended up losing the farm. My metals are a way of insuring that I can pay my property taxes for quite a few years.

I have been buying metals for a long time, but I'd certainly recommend that one has their staples and other tangibles squared away before worrying about buying metals.

As for someone offering a bar of gold for can of soup, they'd get that look if there is a total breakdown of society. However, in the history of the world there have been very few times where gold has not been able to be traded for other goods. As long is there is a functioning society, gold will be a tangible commodity.

 

[On Our own]

It's that functioning society piece that is what I am talking about. People who on one hand think the whole thing is gonna come to an end but still buying gold....

What I mean is: gold makes sense for things like having some wealth to deal with the government, but some people swear the whole of society like the Wesley, Rawles guy is gonna collapse. Then your gold won;t do you much good.

Even sadder to me are the people who are buying GLD while prepping for not short term destabilization but TEOTWAWKI. That is counting on the banking system to still be operational.

 

[k0xxx]

According to Citicorps' Chief Economist, "Savage austerity is in the US's future ". I believe him to be right. A lot more people in the position to know are starting to say similar things.

A society which has lived for a long time in a state of economic uncertainty, and then faced with austerity measures, is going to have to hurdle some serious obstacles to survive. On the other hand, a society that has grown used to a luxurious standard of living by comparison, and then forced into austerity, is liable to freak out padded-room style, and make an unprecedented mess of things.

 

[Dunkopf]

I was just thinking the other day. What would happen if for some reason our banking system went completely down. Not SHTF type thing but no cash coming out of the ATM and no bank to take money from. Credit cards wouldn't work. You would need cash on hand to shop at the store or to buy gas. I decided that I am going to be sure to take out all extra cash that isn't paying bills and use it instead of the atm card to buy groceries, gas and stuff like that. Right now I'm pretty much cash free and just use what's in my checking acct via the atm debit/credit card.

As far as the dollar crashing. Only way to cover for that is to have lots of supplies on hand till the fed gets the mess straightened out. Guns and ammo will hold a few people off. If anyone is serious you're probably SOL unless you live in an easily defensible fortress. Having extra people that could come and help defend the homestead would be a big plus.

 

[k0xxx]

As far as the dollar crashing. Only way to cover for that is to have lots of supplies on hand till the fed gets the mess straightened out. Guns and ammo will hold a few people off. If anyone is serious you're probably SOL unless you live in an easily defensible fortress. Having extra people that could come and help defend the homestead would be a big plus.

I don't foresee having to do the whole defend your homestead type thing when the dollar crashes (unless maybe you live in an urban environment where riots are occurring). I believe that there will be a lot of social unrest when it happens.

IMAO, Our National Debt, combined with "Entitlement" programs, will reach the point where one of four things will have to happen.

One. Austerity. There will be a drastic cut-back in spending on programs such as Social Security, Medicare, Health Care, Welfare, Food Stamps, Government Pensions (but not for politicians I bet), Defense, etc., and reductions in the number of government employed workers. The UK, which finds itself in similar circumstances, just announced the lay off of a half million government workers. Greece and France are both reaping the social results of austerity, and others will follow.

Two. Since it is getting much harder to find another country to buy our debt, we will start buying even more of our own debt. Whether you call it monetizing, quantitative easing, or whatever, it amounts to the same thing; printing money out of thin air. Think Weimar Republic. The Fed meets November 2 and 3 to discuss doing this very thing.

Three. Taxes will be increased. Within five years, to just cover the interest payments on our debt and maintain our current programs, every tax the the Federal Government receives would need to doubled.

Four. Some sort of combination of the above.

The Europeans are opting for a combination of choices one and three. Currently the US is opting for a combination of choices two and three.

Anyway that it is done it isn't pretty and you will probably see social unrest, but I doubt that there would be a societal collapse. You more likely to see the types of demonstrations and riots that are currently happening in Greece and France, and a number of years of extreme poverty for large portions of society.

 

[Wannabefree]

I am/have been stocking needed items for years too. I have a supply of ammo and food and several sources for water, backup energy source for heat and light, potential backup source for refrigeration, and I think we'll be okay without a couple dollars, may use those for TP or firestarters There is always a potential for this sort of thing happening, but I'm not too worried.

 

[i_am2bz]

IMAO, Our National Debt, combined with "Entitlement" programs, will reach the point where one of four things will have to happen.

One. Austerity. There will be a drastic cut-back in spending on programs such as Social Security, Medicare, Health Care, Welfare, Food Stamps, Government Pensions (but not for politicians I bet), Defense, etc., and reductions in the number of government employed workers. The UK, which finds itself in similar circumstances, just announced the lay off of a half million government workers. Greece and France are both reaping the social results of austerity, and others will follow.

I am extremely interested in watching the fall-out from this in the UK. We've already seen the riots in Greece & France, but I haven't seen any footage of anything similar in the UK - yet. All the news-types (NBC, Fox, etc) were saying to keep a close eye on them, as we'll be watching our own future unfold. :/

 

[Mackay]

I totally agree with you Knoxx regarding silver and gold. It will hold value over time and it will help one ease into a new currency system if you put your monetary assets into it.

If theSHTF and you need to use your food supplies there will always be the things that come up over time, like seed for pasture, a medicine suddenly needed, someone who can repair your chain saw, gasoling for the truck so you can gather wood. Silver and gold will be the most likely medium of exchange... and you will prefer that over giving up your stored food.

I like silver due to the smallness of the currency. A gold coin is a lot of money!

Really, it is best to listen to the experts on this issue. Those who have long studied the topic. What they actually say is to cover all your bases... and that includes gold and silver.

Solar Storms could bring the grid down in the next year to three as we go though the solar maximum event. In that case there will be no banking at all. And of course and event like this will be used to impose a new world order with new currency, new government but it will take many years to implement.

 

[~gd]

Gold and silver are valued because they are long lasting and easy to work with hand tools. Copper and aluminum are also long lasting and easy to work with hand tools give me a ton of each and solder and fasteners in return for my gold or silver bar. Of course wood is good too but you can grow your own if you last long enough. Lead, powder and ammo could be common items of exchange or trade. Oh and those silver coins have no useable silver left in them and the penny isn't copper any more. Iron rod, smith's tools and rolls and rolls of Poly make up a part of my portfollio along with liquid assets like cases of pints of well known but cheap wiskey, Those unbroken tax stamps are a great public service from our government too. Don't overlook the common drug store items either.~gd

 

[k0xxx]

...Oh and those silver coins have no useable silver left in them and the penny isn't copper any more...

Just in case anyone wants to check their change jars...

Of the US coins minted for general circulation, dimes, quarters, and halves made prior to 1965 are 90% silver. Halves dated 1965 through 1970 are 40% silver. Nickels dated 1943 - 1945 are 35% silver, as are some of those dated 1942. All silver nickels will have the mint mark over the dome of Monticello, on the reverse (back) of the coin.

Pennies dated 1909 through 1981 and prior are 95% copper (except 1943 when they were made from zinc plated steel). Some 1982 were also 95% copper, but hard to tell apart from the cheaper ones unless weighed.

Based on the current market value of copper and nickel, a copper penny is worth almost 2 1/2 cents, and a nickel is worth about 6 cents. Technically, I believe that it is currently illegal to melt current issue US coins for scrap.