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Over thousands of years of human history, gold and silver have proven to be assets with a reliable intrinsic value.
- Is it because they’re malleable?
- Limited in quantity?
- Useful for producing industrial goods?
- Or do human beings just gravitate toward shiny, hard to acquire things?
Whatever it is, at no time in history has the value of gold or silver gone to zero in any country or kingdom that ever existed, and it’s incredibly unlikely they ever will.
This has caused them to be recognized as “safe haven” assets for investors and preppers – their value may go up and down day to day, but precious metals never become worthless.
This is in contrast to fiat currencies like the US dollar – that is, currencies which take their value primarily from to government dictate that they must be accepted as legal tender. All fiat currencies in history have proven to have limited lifespans.
Therefore, if your fiat currency crashes, the relative value of gold and silver will skyrocket, so some of your wealth will be “protected” by being held in forms that only become more valuable when your local currency implodes. Having a few gold eagles on hand can be a good investment for hard times.
In addition, as central banks around the world engage in quantitative easing, it continually reduces the buying power of fiat currencies. In this way, your wealth is already being stolen from you, bit by tiny bit, through gradual price inflation.
Buying gold and silver puts your wealth into an asset which can’t depreciate in this way, since they have to be mined and can’t simply be produced out of thin air. At the same time there are pros and cons to any investment.
That’s the theory, anyway. However, there are lots of factors to consider if you’re investing in gold or silver, whether it’s to protect your wealth today, in the future, or as a post-collapse currency to use for barter situations after the SHTF. These factors will help determine how successful you are at putting your investments to good use.
This article will go through some of those considerations so that you can invest smartly and be more prepared for a whole variety of potential financial catastrophes.
Precious Metals: If you can’t hold them, you don’t own them!
There are numerous ways to “invest” in gold and silver without actually ever seeing or holding the physical product. For example, some companies allow you to buy gold and silver that they then hold for you in their own vaults.
Others allow you to trade Gold Exchange Traded Funds or ETFs, which is similar to investing in gold and silver as if they were stocks. This is called owning “paper gold” – you essentially hold a receipt, the idea being that a company or bank has gold in their vaults that corresponds with the receipts they’ve issued.
You can trade on the price increases and make profit without ever having an actual piece of gold in your possession. Some people still think this is a better option than holding paper money.
The problem with this is you have little way of knowing if the other party actually has the gold they claim to have. They could also be shut down or put out of business, in which case you may have no way of getting the gold your receipt represented.
In a SHTF situation, unscrupulous executives could even run off with their client’s gold bullion, leaving them with nothing but worthless paper and broken promises.
Basically, if you don’t buy and have the real thing in your physical possession, there is no way of knowing if it truly exists. Cautious preppers will warn that you should assume it doesn’t.
That means the best way to buy and physically hold your gold and silver in locations you control. Any other arrangement simply makes it too easy to be defrauded, or for unforeseen circumstances to wipe out your precious metals before you ever see them.
Whether you hold them in vaults in multiple countries, in your pocket, or buried in a shoebox in the woods, the adage is, you don’t have it unless you can hold it.
Ask yourself: if the financial system collapsed in my home country, would I be able to easily access my precious metals?
So I Bought Gold and Silver. Now Where Do I Store It?
Buying gold and silver is step one. Figuring out how to safely store it, however, is just as important. In a breakdown scenario, you can assume that anyone known to have gold, silver, and other supplies will become a target.
In addition, as during the Great Depression, there is plenty of historical precedent for governments confiscating gold from citizens during a crisis. Avoiding both of these scenarios is critical, but it’s also important that you can access your metals relatively easily.
Despite its misleading name, a “safe deposit box” is only as safe as the bank where the box is held. And as we know from previous collapses like the Great Depression and 2008 financial crisis, banks are not as stable as we’d like to believe. When banks implode, they can take the contents of these “safe deposit” boxes with them.
Therefore, storing precious metals using this kind of service does not allow you to hold your own gold. You can go to the bank and access it today, and maybe you’ll be able to next month, but in a true societal breakdown, you can say goodbye to your “safely deposited” valuables.
Discretion & Preservation
In case you haven’t figured it out, you also probably shouldn’t blab to everyone you know that you’re accumulating enormous piles of shiny gold and silver. That said, despite inherent risks, there’s nothing wrong with storing some of it right on your property. There are plenty of discrete ways to do this, some of which actually help preserve the metals.
You want to look out for oxidation and damage, which means putting all your metals into a waterproof package before putting them away. You can go online to easily buy sleeves and coverings that will help protect your metals.
However, cool temperatures also help, and since your freezer is rarely a place that any robber pays attention to, filling what appears to be an ice cream container or T.V. dinner box with precious metals is a good way to squirrel some away. You’re limited by space, of course, but the idea is to think outside the box.
Just don’t forget any of your hiding spots!
Depending on how many you have, it may be a good idea to create a map of the locations that doesn’t give away exactly what it is you’re hiding. You may want to leave a copy of this map with someone you trust.
You can dig holes outside and cover them with rocks, buy a book with a hidden compartment inside (or cut out your own from an old book you don’t need), or slip plastic tubes of gold and silver into pipes in your basement that no longer connect to anything.
Another great idea is placing them into the soil of a large pot and growing a plant. Neither benevolent in-laws nor a midnight robbery crew would ever be likely to suspect that there was treasure hidden inside the dirt.
If you don’t mind doing a little DIY work around your house, you can even build false walls, removable bricks or floorboards, or other “dummy” objects that appear completely nondescript, but are secretly hollowed-out storage areas.
For precious metals you aren’t comfortable keeping on your property, there are insured vaults that allow to buy storage space. These paid vaults are probably the next best thing. It may be harder to access your gold, but they will be much safer than they would be with any bank.
This contrasts with facilities that give you a paper receipt in exchange for a claim. If you can’t confirm they will keep the actual, physical gold in their vaults, you shouldn’t do business with them. Even so, keeping precious metals in a company’s vault may make it difficult to access in a crisis.
Therefore, if you go that route, research countries that will be most likely to be insulated in a crisis, and likely to allow for easiest access to your investments. Switzerland and Hong Kong are both seen as good countries for this purpose.
You could fill an entire separate article with considerations specific to storing gold and silver in paid vaults, so do some research online if you’re thinking of going this route.
When Does My Investment Make Money?
Gold and silver are commodities that traders might buy and then sell just a year or two later for shorter-term profits. However, for prepping and survival purposes, the idea is not to make money, but to protect the money you have from financial calamity by putting it into a physical asset. Gold always has some value and it is an excellent hedge against the inflation that fiat currencies are subject to.
Therefore, you shouldn’t invest in physical gold and silver to make profits or thinking you’ll become rich. Simply buy in whatever increments you can at a time, and hold it.
Like the gear in your bug-out bag, it’s meant to there for when you desperately need it, not for this weekend’s camping trip. In the meantime, all you do is hold onto it safely. That means you want to buy at as low a price as you can, but don’t worry about timing the market, which is usually unproductive anyway.
You aren’t in this to make quick money, but to play the long game of protecting your hard earned money against inflation, and ensuring your wealth and means of transacting business are preserved even if if the financial system crashes. Known to many gold and silver preppers as “stacking,” the idea isn’t about buying low and selling high.
Rather, it’s to buy incrementally when the price drops to add to your precious metals “stack,” and then never sell until your financial survival depends on it.
If a crisis never arrives, congratulations – you now have an incredibly valuable nest egg of physical assets that you can pass down to your heirs!
Practicality Considerations: Day-to-Day Transacting vs. Wealth Preservation
Prepping with precious metals probably comes into two categories:
- being able to preserve wealth in a collapse
- being able to transact with others despite your fiat currency becoming worthless.
These two categories of precious metal prepping carry their own special considerations.
1. Preserve Wealth
We’ll start with the preservation of wealth angle. As long as they are genuine and of high purity, any type of gold and silver will work, whether they’re in the form of bars, rounds, hand-poured, minted by governments, or from some other source.
Some may have more value because of where they came from, how easily verifiable they are as genuine, and other factors, but they will all retain some value even—or especially—as fiat currencies become weaker.
However, if the price of gold hypothetically went to ten thousand dollars per ounce, it would hardly be practical to try to buy a loaf of bread for your family with a one-ounce gold coin. Same goes for an ounce of silver. Therefore, as with other types of investing, diversification is key.
You should have precious metals in a variety of weights and formats all the way down to a single-gram or lighter, if possible, since these will be more practical for trade. Larger-weight pieces are better for preserving wealth since they wouldn’t be practical for day-to-day purchases.
Since silver is worth less than gold, and likely always will be, it’s usually seen as the better option for post-collapse transactions like buying food or water filters. Gold, with a higher value by weight, is more commonly seen as ideal for wealth preservation but less practical for bartering.
2. Transact with Others
Realistically, it would probably also take some time after a collapse before gold and silver started being accepted as money. In the early phases, people will still be trying to use cash and bartering immediate items for immediate needs.
It would be after the initial phase of collapse that gold and silver would start being traded more, but there’s no telling how long any given collapse phase would last.
That’s why, as with all aspects of prepping, you need to make educated guesses where to invest your time and money and do so thoughtfully. Preparations that are life-savers during one phase might be worthless in another, but that doesn’t mean either should be ignored.
More on that in our closing section below.
Go for the Gold
You want to have some gold and silver, but not so much that you aren’t investing in enough emergency food, water purification gear, hygiene products, and other survival and barter items. It’s all about balancing what you can spend and spending it carefully, so that you’re as prepared as possible for as wide as possible a variety of situations.
Your preps should also address different phases of collapse. If Family A has more gold than Fort Knox but no food or water purification supplies, they’d be unlikely to last through phase one of a societal breakdown.
However, those with gold and silver who manage to make it to the later phases would have an immeasurable financial advantage as a more formalized post-collapse financial system began to take form. Every prep you make is at the expense of time and money you could have spent on others, so balance is key.
Try working a little bit of precious metals buying into your budget every month—you’d be surprised how quickly you can accumulate metals with just small investments every month. And plan very carefully regarding how you store the metals that you buy.
As long as you keep all those considerations in mind, set up your monthly precious metals budget, find a reputable physical gold and silver dealer, make a long-term storage plan, and quite literally, go for the gold!
Eric is a nature-loving writer, experience junkie, and former Boy Scout who never forgot that time-honored Scout Motto: Be prepared. Aside from camping and survival, he loves writing about travel, history, and anything he finds strange and unique!
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