Advice commonly given in the survival realm is that you should buy gold and silver to protect your wealth and buying power in case of a currency collapse. Where do we at Worst-Case stand on this? It’s actually a little out of scope for us, as currency collapse is not nearly the worst of the worst-cases, but we do have some thoughts. If you are planning for a less-than-apocalyptic scenario (as a currency collapse would be), then yes, buy precious metals as they will almost certainly hold their value. But understand that currency collapse is small potatoes compared to grid collapse (which you know by now is kind of our focus). With the high mortality from violence, starvation, and disease that will accompany a nationwide grid collapse, precious metals won’t be so precious; their full worth only stands if there is some semblance of societal order and a continued agreement of assigned value.
Some contend that even in such an apocalyptic event, precious metals will be beneficial for bartering. Possibly, but not an ideal plan, in our opinion. We aren't actually fond of bartering because of the increased risks that such interactions would bring you in a land without rule of law; however, we’ll share this advice: If you want to have barterable commodities, invest in things that are guaranteed to hold real value in protracted fight-for-survival events. These can be grouped into two categories:
things that people need to survive such as food, water, medication; or,
things that people want to feed their addictions, such as tobacco, coffee, and alcohol.
Precious metals don’t make either of these lists. Regardless, you shouldn’t spend a dime on barterables of any kind until you’ve checked all the boxes in the Big 4 of Survival. (But if you’ve done that, you won’t have much need to barter!)
Here are some other considerations with precious metal:
Government confiscation
That may sound completely implausible in the somewhat stable times we’re in, but precious metal confiscations are not without precedent Gold & Silver Confiscation. (If you can ignore the sales pitch, the link does provide a succinct outline of how governments have gone after citizens’ holdings in the past.)
Access
Where do you keep your silver and gold? At a bank or with a custodial company like Brinks? Remember, they won’t be open during catastrophic events...certainly not for walk-in traffic, and possibly not even for online trade depending on where their servers and staff are based. Bottom line: if it’s not in your immediate control, you run the risk of not being able to get your hands on that very expensive investment.
Any downsides to keeping your precious metals at home then, where you can access them at any time? Well, yes: your safety could be compromised. If you do keep your precious metal stockpile at home, it must be a well-kept secret from everyone, including family members, who may inadvertently let something slip that puts all of you at risk. (Stockpiling food and supplies doesn’t bring the same risk…in regular times, no one is going to invade your home because they heard you have thousands of dollars worth of canned food there, as they might for the same dollar value in gold.)
If you do decide to keep precious metals at home, are you going to put them into a large, fireproof safe? Will you need that safe delivered and installed by others? (We won’t even finish this point…we think the risk is obvious enough.) If it’s a portable safe that you can carry in yourself, that limits the capacity, and could end up getting carried off almost as easily. That said, there are some very resourceful people who could come up with a storage solution no one would find. Problem solved? Not completely; that just leads to the next challenge…
Using it
Again, precious metals, and jewellery for that matter, are only as good as the value that is assigned to them in stable times. When the lights are out (and it’s been realized that they are not coming back on), very few people will want those things. A month in and you’d have more bartering power with a loaf of bread than a bar of gold. However, even if you could find people willing to trade with you (likely meaning they believe that society will recover and they can cash those precious metals in later, or somehow get out of the affected area with them), you won’t be able to count on full return on your investment...you may have to let it go at a fraction of its pre-collapse value, as you will be desperate, and those you seek to trade with will know that.
Using your precious metals for bartering for small items in an apocalyptic scenario is also problematic, as even a wee 1-ounce bar of gold is valued at nearly $3000 Canadian today; you may end up trading that bar for something worth far less. Gold or silver coins can be acquired in smaller weights, but even then, their value far exceeds what you would need for the small-item bartering that will take place during the hand-to-mouth struggle for survival of a protracted grid collapse.
Yet another challenge is proving your precious metals are legitimate, as not everyone (or really, almost no one), has the expertise to distinguish a good fake from the real McCoy Gold Maple Leaf among most counterfeited. Further, it may be difficult to explain in a street transaction that the coin you are presenting is worth far more than the denomination stamped on its face, as is the case with the coins in the following link that are stamped ‘5 DOLLARS’ but sell today for $400 The Royal Canadian Mint. There will be no internet to support your honest claim…you may literally end up getting face value only, if you can even convince people to take your coins.
All that aside, security becomes a concern if you’re regularly seen to be bartering with precious metals or jewellery…you may as well paint a target on your back, which admittedly is a concern if you are bartering anything of value, even food. It’s for this reason that we really aren’t fans of bartering with strangers…it’s antithetical to true self-reliance, or mutual-assistance-group survival. You also give up the retreat-to-the-woods option, as you’ll need to stay where the people are. It also assumes that there will be people who have surpluses of food to trade. With no more large-scale agriculture, food processing, or supply chains, where will that food be coming from? Appreciating its scarcity, who will want to give up food they need for their own survival for any amount of gold or silver?
We won’t argue that in a post-apocalyptic world, perhaps a year or two into it, small denomination precious metals may re-emerge as a form of currency to facilitate trade during a societal rebuild, but you’ll need to survive the main event first, and it’s predicted that most won’t.
Maybe, and this is a big maybe, there will be value in holding precious metals if you have a chance to buy your way out of the shit, but that shouldn’t be your Plan A. Perhaps you can hire a Han Solo to evacuate you and yours, and to pay off border officials at some unaffected nation, but if and when that option becomes available, it won’t be cheap.
Alternatives
So once you’ve covered all of your food, water, shelter, and security needs, is there a way to keep some buying power other than precious metals? Yes: cash. While keeping a wad of cash under the mattress is a terrible way to protect its long-term value (because of inflation), cash will at least have some utility in the small window immediately following a grid collapse, or even in the less apocalyptic, but more frequent, localized power outages that render your debit and credit cards useless Rogers outage shows need to keep cash in a digital world. People are used to trading in cash (more so than precious metals or jewellery), and while you may have to pay greatly inflated rates for what you need, having cash will give you this option The history of price gouging amid US disasters.
If you’ve read any of our other posts, you’ll know by now that our usual advice for a worst-case survival scenario is to head for the hills…get away from the masses with a small group of trusted people and ride out the storm. Perhaps that’s why we aren’t particularly interested in investing our finite resources in precious metals…they have little utility in that plan. That said, we realize some people may not see the wilderness as a fit for them, and may prefer to stay in populated areas, where the challenges are more familiar to them. If that’s you, and you possess a level of affluence now, our advice is to stock up on the ultimate currency: food. Use the money you would have spent to acquire precious metals and buy literal skids of canned and dry goods. (Don’t dismiss the idea thinking the food will expire as quickly as the dates stamped on the packaging might indicate; per the US Department of Agriculture, most shelf-stable foods are good indefinitely Before You Toss Food, Wait. Check It Out! | USDA .) Guarding your stockpile of food in troubled times will be a concern, but if you aren’t confident in your own abilities to do that, you could hire others to do it for you, paying them in food. Still not without its dangers, but taking to the wild isn’t risk-free either.
In summation, our advice is to make worst-case survival plans now and acquire the food and supplies you will need to get out of Dodge, or to survive where you are while you shelter in place, if that’s your preference. Either way, sitting on a stockpile of precious metals without covering all of the other bases is, in our opinion, not a wise plan.