The Arizona House of Representatives passed a bill Monday making gold and silver legal tender in a move that marks America’s growing weariness of the Federal Reserves current monetary policies. The law also states that, since it will be considered legal tender, gold and silver will not be subject to tax or regulation as property. “Senate Bill 1439 would let people use the precious metals as money as long as businesses agree to take them. If made law, it would take effect in 2014,” the Associated Press notes, adding that the metals would not have a set monetary value. On Wednesday evening’s broadcast Glenn Beck explored the role precious metals are playing in the new American economy. What’s more, he also explained why America’s flailing currency signals trouble on the international stage. Radio Personality and Founder of theBlaze.com, Glenn Beck had this to say about the situation; “The dollar is on the brink and it is quite apparent that everyone else in the world knows it,”
So you may then ask yourself…
WHY WOULD I BUY PRECIOUS METALS?
WHY? Well because it’s a prudent measure. In a financial collapse, a starving person will not trade food for silver or gold, because that would be stupid! Would you? However we can’t get stuck into this mentality that just because things WILL get bad, that they will ALWAYS be bad. The commonly imagined scenario of collapse theorizes that people will be starving for years and years and years, but even in this worst case scenario, total anarchy, MadMax, book of Eli stuff, People rebuild. If history has taught us anything is that humans are VERY resourceful. We survive then rebuild. When that happens excess appears on the traded markets, excess equals wants, wants equals symbols of wealth. On top of that – those that travel and trade will also need some form of compact wealth to trade and do business with, without having to haul thousands of animal pelts, bushels of corn, or chords of lumber. They will want something that holds a lot of value in a small form- and that my friends, is precious metals. However, this thinking is designed for worst case scenarios only- just the absolute worst destruction and collapse imaginable.
In a more likely scenario of a collapse or partial collapse of the world and US financial system, you will see a worse repeat of the US depression of the 1920s. Food prices will skyrocket, more people will be out of work, more government regulations and “clamp downs” on crime. Most people will still be working, but making significantly less, then they did before. Our economy will start to mirror the economies of less developed countries around the world. The basics necessities will be available, but expensive, underground economies will start to form. Barter will be used more to get around taxes as well as to trade value for value. Most people will barter on a small-scale grain for meat, lumber for livestock, etc. However people will, always have and always will, take silver and gold for items, because, well other people will. He may not wish to, that is his choice and prerogative, however that doesn’t change historical fact. You will meet people who will take it, as well as those that wont take it.
“The Collapse” is always preceded by a period of instability. The collapse itself is not the “wake up and its all over” event, its the slow, or fast inflation of the prices due to devaluation of the value of the currency and the collapse of systems we have come to rely on. During this period, which will last MUCH longer than the period of “anarchy” between governance periods will be when you do the lions share of your barter and start using, dipping into or trading your preps. The dollar will still be used but will be worth less every day, and prices will go up, this may or may not be hyperinflation. Let me make this perfectly clear – I am in no way saying “Buy silver over food”, I’m simply saying -make it a PART of your preps, if you have your preps pretty well handled, whatever you don’t need for bills and mortgage payments I would personally put into metals. Why? Because those items (unlike paper currency) continue to hold their value while the dollar drops. That silver coin your granddaddy got in 1920 still has the same value today as it did now, the 1 dollar bill, does not. You need to have cash available to pay bills and I’m not talking about cashing in your 401k’s to buy silver or gold either. It would be crazy to have no cash on hand but a mini Fort Knox full of silver and then when the monthly bills need to be paid, you and your silver sit alone in a cold, powerless home. (Unless your utility company excepts precious metals!)
During this period of price inflation that 20 dollar bill will buy less and less of the food you need, while those silver dollars will continue to buy the same amount as they did before the collapse really takes effect. Having some silver and gold will allow you to cash it in and buy the same amount of food as before the currency’s value plummeted. Even if you have an abundant collection of food, water and other preps, with your supply of silver or gold, you may still be able to go to the store buy the beans, rice and veggies in a can like you used to and save your current stash food preps for the truly dire times.
Silver and Gold will be of some use during a collapse but not as much as AFTER the fact. Once again, I must say – this as a long-term investment. Yes it can be used for trade in some or many circumstances DURING a collapse, however after is where it really starts to pay off and benefit you. During a collapse the current currency will be devalued, and may even disappear for a time. After that a new currency will appear, or the old one may reappear but be rebased. When this rebasing happens the old currency will be exchanged for a much reduced rate, say 10-1 or even 100-1 or a everyone gets 2000 of the new bills kind of plan. So either way you look at it, your old bills will be worth MUCH MUCH LESS than before – and you probably spent them already during the collapse at even higher rates for items of necessity. Gold and Silver will still be highly valued because they always are when currencies are being hit hard or are suspect. That is, if the dollar is sliding down the toilet, gold goes up, if the dollar is doing well gold goes down (generally speaking, there are other factors, but 95% of the time this holds true). If a new currency is introduced, especially after a collapse, people will not very confident in the new currency, thus metals will still hold its value or still continue to trend up.
If you have a good amount of preps, and chose to buy another 3 years worth of food to be used for barter – when things start to get better, farming picks up, food is more plentiful… Now those preps that were once worth their weight in gold (literally) are now worth significantly less. People will have better access to food at that point, so they don’t want to pay the big bucks for your buckets anymore. This is a good thing overall, but this is where having gold and silver will come into play. They hold their value, and will always be worth something. Bartering and trade, economics and supply and demand don’t care about what you think or what you think is true, it’s about society as a whole. Historically this is true, and as much as we like to think that the collapse of America will be “completely different” it’s not, it has happened before and will happen again in the future.
In the end its up to you, and your own decision, however if you look at the history of other countries and societies that have collapsed, from thousands of years ago to those in the middle of it now, the lessons are the same. We don’t get to escape it just because we have a red white and blue flag, or because we have a beautifully crafted constitution, or because we’ve put a man on the moon – Mankind will be mankind. If we continue to make the same mistakes, the same mistakes will result in the same consequences and the reality is – after the consequences come to pass, the same basic principles and foundations are necessary for things to be rebuilt. And rebuilding is as guaranteed as the collapse.
In our next post we’ll talk more about how to purchase “junk silver” at a much better rate than retail pricing. For more info on purchasing precious metals be sure to visit our friends over at BuySilverCoins.com
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