When Will The Economy Collapse?

[boomerang]

If one is a really old fart like me you may remember when American dollar bills were "Silver Certificates" and one could actually redeem each paper dollar for a nice silver one. My, how times have changed !

 

[Jeff Davis]

Ever walked into a store and attempted to purchase goods with gold? If the dollar becomes worthless, so does gold. It's what we measure gold's "real" value by.

 

[stonehart]

 

[mike]

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Actually those are nice coins, and having a dollar value on them makes them legal currency as well, which technically makes them "collector's coins", which in some places are exempt from capital gains tax. So if you bought them at the current undervalued price now and silver doubled in price, you may be able to double your investment without the heavy tax. IMO silver is being artificially devalued just like gold was. It should be at least quadruple the price it's selling for now.​

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Ours are worth $5 CDN and look like this:​

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Yeah the Maple leaf is another nice looking coin, but as i said i steer clear of rounds with a dollar value on them, i can just see myself trying to argue that the silver value is greater than the face value with some ignoramus.
I agree they are shorting the paper value of gold and silver right now to drive down the price so they can buy up the physical cheap, but im just as happy to be grabbing what i can at low prices too, we dont have the shortages the US is having right now in actual physical.
The perth mint is well stocked as are the local dealers.
This one has just come on the market at a really good premium over spot

We paid 24 ausdols an ounce for ours where the Scottsdale omnias were 28.50 on the same day

 

[mike]

Ever walked into a store and attempted to purchase goods with gold? If the dollar becomes worthless, so does gold. It's what we measure gold's "real" value by.

In normal times yes, thats correct.
But as we saw in Cyprus recently, business' were taking PM's and jewelery.
Its why i prefer silver rounds over bars (though we do hold bars as well).

In a SHTF scenario like we saw in the Bosnian example the barter system takes over, Truth is currency was invented to address the major flaw in the barter system.

That being sometimes what you have to barter isnt what the person who has what you want needs.

Coinage/currency gives you flexibility.

The baker selling bread may not want my tomatoes in trade, but i'm betting he/she will take silver, because they in turn can use that to trade for things they need.

You are right you cant eat PM's and Silver has no greater value than steel when you drill down, a logical case can be made the harder metals are far more useful there fore valuable.
But traditionally these metals are recognised as good items in the barter system, giving you flexibility within that system.

The baker can make the choice, take my silver which he can in turn use as a trade item, or make no sale.

The only variable will be the value in trade, how many loaves of bread will an Oz buy ?

Its my view the inherant and traditional flexibility tied to currency will give it an edge over straight out barter of perishable goods like tomatoes etc.

 

[mike]

But in principle i agree that Gold in and of itself has little practical value, why should a soft metal be valuable, oh its biologically inert so its useful as filings but really why should it be worth more than Salt ?

And yet roman soldiers were paid a "salary" in salt.

Today Salt is cheap and we add a bag of it to our shopping trolley every couple of weeks, But in the days before electric freezers its was useful for preserving food.
Anyone who has a kitchen garden knows in one season it produces more than you can eat, and in another nothing.
Salt's value changes with the circumstances.

Value is relative

In todays world we dont even get a "salary" anymore, we get paid in virtual credits, which are spent without the money ever crossing your palm.
There is no "real" money on the internets, its all done with virtual credits.

A Massive solar flare this time next week......... and its all gone

And if that happens it will make the Bosnian example look like a week at church camp.

The value of Salt will skyrocket, especially inland. actually anywhere more than a day or twos, horse and cart rides from the sea.

In this scenario you cant think in terms of "purchase" but rather trade.

IMO pure silver (not the subway tokens they issue these days as coins) will (especially) in coin form, be recognised as it has been in the past as a valued item in the barter/trade system.

In adition to the flexibility it gives you in a barter system, its also a standard 99.9 pure is 99.9 pure Thats why we called it the silver and later gold standard. Its a fixed value that allows you to set its relative trade rate.

To me buying it in small amounts is like an insurance premium, but unlike regular insurance thats gone when you pay it, i get to keep my coinage.

And if a solar EMP wipes out the virtual credits we have in the bank...... I'll be glad to have it on hand

 

[dyingsun]

I'll just go into full Zombie mode, 'kill what threatens'...let's hope it will never come to this, as cute as doomsday stories are.

 

[DaveM]

If there is ever a run on food and water in this country, I think you will find that all the gold and silver wouldn't be worth a thing for those who are sitting on their treasure trove.

 

[Tyger]

If there is ever a run on food and water in this country, I think you will find that all the gold and silver wouldn't be worth a thing for those who are sitting on their treasure trove.

The value of gold and silver stem from their centuries upon centuries ago being the metals highly prized for making key implements and vessels. It was worth 'buying' these metals (in the past) already mined rather than extracting them from the ground oneslef. Mining being a more onerous, more 'expensive' process - and only possible really for a king or tribal leader with a supply of either willing or - usually - slave labor - so unavailable for most people. Hence the 'intrinsic' value of such metals put into one's hand for one's gaggle of geese - truly a valuable commdity. Back then people really could have used the metal for practical purposes - one could make a beautifully wrought golden drinking cup and a king might give you a cottage.

However, in a break-down as is being envisioned (highly unlikely in the US imo) gold and silver would not have any intrinsic worth for a population in subsistence mode with plenty of implements already made out of stainless steel and plastic. If someone approached a community 'wealthy' with food and shelter, perhaps the inhabitants would take a wheelbarrow full of gold, silver and jewels as 'payment' for a year's worth of living with the community (an example) but more valuable would be the person's knowledge (medicine, dentistry, carpentry, pottery, electrician, masonry, techno-savvy, etc - a trade) and ability to work. Taking the gold and jewels would be because basic needs are met and 'purchase' of the 'pretty things' would be seen as acceptable.

In fact, regarding the Native American Indians 'selling' land and what-not for blankets and beads. While I am well aware there were other factors playing into those transactions, what was also operating was that the Indians had no basic wants/needs. The beads and blankets represented a lot of man-hours of labor and they saw them as immensely valuable. Same with the gold-silver and jewels - once there is security in basic needs - such will be seen as a luxury that would be nice to have, very pretty, like the beads, and representing a lot of man-hours of labor (as like with the mining for gold-silver) with the blankets.

Regarding a break-down in the US - which I consider unlikely - (Sheer momentum drives the US economy even in the worst of times) - break-downs might be possible regionally - central region and south (land-locked and very hot). Areas with coastline and in a temperate climate will likely survive okay - which is why if there is a significant change in climate - making the US hotter, more tropical - all bets are off.

 

[stonehart]

as an aside to the subject thus far it looks like my fellow countrymen are finally starting to wake up.. took them long enough.

Kiwis on the march: Thousands turn out against new spy powers in New Zealand — RT News

 

[stonehart]

Oh and something else for you British out there.. read this and think very carefully about where this is going to end.

So Britain's prime minister now admits he also wants to filter political, cultural or other stuff that he thinks is bad for his people.

Let that sink in: Britain is on its way to become a state-censored country, with censoring infrastructure provided by the Chinese.

One of UK’s favorite ISP-level porn filtering services controlled by Huawei | Ars Technica

Of course, you can have them unlock filters, if you specifically ask them to do it. So you either have no access to information, or you provide the government with a list of things you are interested in. Now, what ideas might they get about those lists in another 10 years?

I wish people would just open a damn history book, to find out how this will all end.

 

[mike]

Was talking to a guy in china via game chat recently they cant even DL a torrents file.

I still maintain in a financial collapse gold and silver will be useful as "money"

Money has never had any intrinsic value.

Shell money - Wikipedia, the free encyclopedia

Encyclopedia of Money: Cocoa Bean Currency

Encyclopedia of Money: Sugar Standard of the West Indies

So what gives Money its value

Money needs to have five main characteristics.
Portability - The ability to carry it around easily.
Scarcity - It has to be earned not easily found.
Acceptable - It needs to be known and accepted as the correct kind of money.
Divisible - It needs to allow people to compare the value of thing. For example: $1.00 = 100 cents.
Durable - It can't be damaged easily or go off.

Silver has a long historical precident as fitting these criteria well

The silver standard is a monetary system in which the standard economic unit of account is a fixed weight of silver. The silver specie standard was widespread from the fall of the Byzantine Empire until the 19th century. Following the discovery in the 16th century of large deposits of silver at the Cerro Rico in Potosi, Bolivia, an international silver standard came into existence in conjunction with the Spanish pieces of eight. These silver dollar coins played the role of an international trading currency for nearly four hundred years.

Arizona lawmakers say the global economy is on the precipice of financial ruin and the U.S. dollar could soon be worth less than the paper used to make it.
These doomsayers are pushing forward legislation that would declare privately minted gold and silver coins legal tender

Arizona lawmakers back gold, silver as currency - Yahoo! News

Utah became the first state in the country this month to legalize gold and silver coins as currency. The law also will exempt the sale of the coins from state capital gains taxes.

Utah Legalizes Gold, Silver Coins As Currency

Americans Returning To Silver As A Medium Of Exchange
Indeed, silver´s monetary role has been so universally recognized throughout history that the very word for silver is money in many languages. In Italian, Spanish and French the words for 'money' and 'silver' can be interchanged. In Hebrew, the word kesepph means both silver and money.*

Which again is why i prefer minted rounds over bars, they carry the psychological tag of "money"

Those who claim it will have "no" value in a collapse are ignoring the very recent Bosnian example

Were gold and silver useful?Yes. I personally traded all the gold in the house for ammunition.

Hardly of "no" value. PM's were in fact useful (ie valuable) as a trade item.

But those who are certain it will have no value are free to have none.

Me i'm banking lol, on it as universally recognized throughout history as a useful exchange item.

 

[Tyger]

Money has never had any intrinsic value.

So what gives Money its value?

Yes, money has had intrinsic value when it was gold or silver coinage - because those metals could be melted down to be used in very practical ways. Or you could find someone - who used metal in their trade - who would want it.

Money's value is based on trust - currency is a promise.

 

[mike]

On the Intrinsic Value of Precious Metals - TCS Daily

 

[boomerang]

more valuable would be the person's knowledge (medicine, dentistry, carpentry, pottery, electrician, masonry, techno-savvy, etc - a trade) and ability to work.

IMO, this is spot on and secondary only to primary physical survival.


Part of what makes any type of coinage or paper money valuable as tender for goods and services is the collective belief of a given society in its value. There is an esoteric aspect to the concept of legal tender, especially paper money. This is (I think) why our dollar bill seems covered with designs calculated to engender feelings of the mysterious. So in a weird kind of way, the value of legal tender is collectively pulled up by its own bootstraps, is it not?

Perhaps the right question to ask is what kind of collapse for which to prepare. We would expect a long slide downward to be a different scenario than an apocalyptic event leaving "every man for himself". And almost every conceivable scenario should involve concurrent competition and collaboration. Are we talking about economic survival within an increasingly dysfunctional society, or "living off of the land?" Or some combination of the two (most likely) ? This gets complicated. Alas--The one thing a survivor would almost certainly need in the event of severe social decline is weaponry. Even if one is fortunate enough not to have to use it. If you asked any 19th century subsistence pioneer to comparatively rate the value of his/her few possessions, I can guarantee knives and guns would be near the top. Heinlein had this one smack on.

History would argue in favor of precious metals having some intrinsic value beyond the psychological. One would be hard pressed to say why this is so. If nothing else, gold is one of the least degradable substances on earth and of limited amount in nature. Would it be of value in lawless societies living from meal to meal? That's a good question. But it could well be one of the first things accepted as legal tender in a recovering economy. In an odd kind of way, tangible demand for precious metals, and all kinds of substances in rare natural abundance, is going steeply up as technology advances. Perhaps we should all be socking away lithium.

 

[Tyger]

On the Intrinsic Value of Precious Metals - TCS Daily

The article is not working from an historical perspective. I don't know who is writing the article but it appears to have an agenda (not a bad word, just saying - there's a pov in there (which is totally okay) but not facts.

 

[Tyger]

Part of what makes any type of coinage or paper money valuable as tender for goods and services is the collective belief of a given society in its value. There is an esoteric aspect to the concept of legal tender, especially paper money. This is (I think) why our dollar bill seems covered with designs calculated to engender feelings of the mysterious. So in a weird kind of way, the value of legal tender is collectively pulled up by its own bootstraps, is it not?

Correct. The gold standard was a fallacy - and had been for a couple of centuries. Currency is pretty much a contract, of a sorts.

The first kind of 'paper money' was really a contract. The routes to the Holy Land during the first series of crusades (in the Middle Ages) became extremely hostile, with robbers et al. Enter the Knights Templar who established castles on the routes and then initiated a system whereby a King or Knight traveling with their army, could leave gold and silver (or commodities considered of value) with a castle in one location and be issued a piece of paper that effectively was a contract promising the Knight the ability to get back some of the gold (or commodities) further down the route at another castle, when provisions were needed (rather than robbing the local peasantry themselves). (Ach, sorry for my dullish writing - I've pulled an all-nighter trying to get some work finished and I am all cottony in my head - hope my text is clear).

Thing is - money is an old concept - coming out from a very different world from that which we are morphing into. Money does not have an intrinsic value - or 'truth' - except that it represents labor (energy), which always gets lost in all these discussions. It's completely a cultural convention. It is what we say it is. Or more to the point - it is, or should be, what the laborer says it is. This gets complicated because we have a topsy-turvy world where the laborer is being robbed of his labor's value. The laborer is having his energy literally drained away, given to others.

Perhaps the right question to ask is what kind of collapse for which to prepare.

The way I see it is that it is not a collapse - it is a great shift - and that is always complicated and chaotic. There is no reason to fear. Fear is a choice. Some will be afraid and will make choices that reflect that anxiety. Others will find themselves pressed to the wall and in that extremis will think up new creative ways to handle a situation that is shifting. These will be those who by their actions determine a new path forward. You can already see some of the new ways forward emerging.

History would argue in favor of precious metals having some intrinsic value beyond the psychological. One would be hard pressed to say why this is so. If nothing else, gold is one of the least degradable substances on earth and of limited amount in nature. Would it be of value in lawless societies living from meal to meal? That's a good question. But it could well be one of the first things accepted as legal tender in a recovering economy. In an odd kind of way, tangible demand for precious metals, and all kinds of substances in rare natural abundance, is going steeply up as technology advances. Perhaps we should all be socking away lithium.

Nice paragraph. Gold is maleable and does not rust. It is rare, has a beautiful quality - and in ancient times it was associated with the gods and had sacred connotations as well as healing properties. People then saw money exchange as a passing of 'spirit' from one person to another. Interestingly, money needs to be an exchange to have value - and money today is understood to be 'energy', in more than just philosophical ways.

Our problem right now is the hoarding that is taking place. Banks are plump with money but refusing to lend money - and are in fact vacuuming up people's wealth at an alarming rate. The whole system of exchange has broken down - not because it had to break down - but because it is being forced by very greedy and stupid people.

 

[mike]

The article is not working from an historical perspective. I don't know who is writing the article but it appears to have an agenda (not a bad word, just saying - there's a pov in there (which is totally okay) but not facts.

Funny, i had the exact same thought about your posts here

Yes, money has had intrinsic value when it was gold or silver coinage - because those metals could be melted down to be used in very practical ways

Actually prior to the industrial age there wasnt much practical use for gold at all, Its value was either as a decorative item or as coinage

Gold has been used for centuries for jewellery and decoration.
Gold is also well known as a coinage metal (because of its scarcity, inertness, and decorative features)

WebElements Periodic Table of the Elements | Gold | uses

Applications of Gold

# Well, it is known to all that the primary use of gold is associated to jewelry. About 78% of the gold consumed each year goes in the manufacture of different jewelry products. So talking about uses of this metal in ancient times, it was employed in the production of ornamental objects, and this fact dates back to about 6000 years. Again, why is gold popular in the manufacture of jewelry? It is because of its properties of being lustrous, bearing a desirable yellow color, being tarnish resistance, and most important of all, being incredibly high in malleability and ductility. A famous example is the gold foil which is placed in Toi museum, Japan. This foil is about 0.5 square meter and it was formed by hammering a gold nugget of a mere 5 mm in diameter. So, you can see how far this metal can expand.

# Not only in making of ornaments, gold, being a highly valued item, was used as a medium of exchange or money. This use of gold in transaction first occurred about 6000 years ago. It was in about 560 BC when the first gold coins were minted. This occurred under the reign of King Croesus of Lydia. Pieces of gold were used for transaction purposes until the 1900s, when paper currency came into use.

Uses of Gold

Yes you could make a goblet out of it, but in terms of practical uses its no better than pewter or even ceramics for holding liquid.

Even gold in dentistry is a recent application

The application of cemented golden blocks in a cavity was born in 1884 thanks to the dentist Aguilhon of Sarran, who introduced his technique to the Society of Stomatology of Paris in 1903.

Thus as Boomerang makes mention of, its "value" is actually a collective belief in such

Let me give an example, imagine you have a pile of gold coins on the kitchen table, a home invader bursts in and ransacks the place, finally grabbing all the cocoa beans from the pantry and departs.....

It would in our cultural collective belief be a WTF moment.

But thats what happened to the Aztecs when the spanish arrived, the spanish took all the decorations and left the bags of "money" behind.

Now today Gold has more practical applications, but prior to the industrial age it didnt have much at all. You cant make pots and pans out of it, nor swords nor plowshares. Its applications were limited to decorative items and jewelery and as coinage. Its "Value" as coinage being a cultural and psychological construct.

It meets the criteria for coinage

Money needs to have five main characteristics.
Portability - The ability to carry it around easily.
Scarcity - It has to be earned not easily found.
Acceptable - It needs to be known and accepted as the correct kind of money.
Divisible - It needs to allow people to compare the value of thing. For example: $1.00 = 100 cents.
Durable - It can't be damaged easily or go off.

Its Acceptability being the aforementioned collective belief.

I'll sum up with a poem thats long tickled my fancy

Copper will tarnish
Brass it will rub
And Pewter will make your house look like a pub
But if youve got silver, no matter how old
You've always got something..........Thats not made of Gold

 

[Tyger]

Tyger Quote: "The article is not working from an historical perspective. I don't know who is writing the article but it appears to have an agenda (not a bad word, just saying - there's a pov in there (which is totally okay) but not facts."

Funny, I had the exact same thought about your posts here.

Oh, dear, one reason not to post at 2:00 a.m. in the middle of other work, no matter how tempting. There's a lesson there - but maybe not. I sort of knew I shouldn't post to this thread but I did - it was very tempting.

Btw - I hope I am posting from an historical perspective - given my background and line of work. But just to say, I am posting making very broad statements (never good) and am posting relying on memory - I'm not googling or checking wikipedia. But even were I to be, it's possible I might have a debate with any info garnered in that manner, anyway. Historians do disagree.

I am not able to debate via links - checking links and assessing reliability - there's a time factor in all of that, unfortunately. I can debate you - how you think about things. I think that's fair.

 

[stonehart]

Oh, dear, one reason not to post at 2:00 a.m. in the middle of other work, no matter how tempting. There's a lesson there - but maybe not. I sort of knew I shouldn't post to this thread but I did - it was very tempting.

Btw - I hope I am posting from an historical perspective - given my background and line of work. But just to say, I am posting making very broad statements (never good) and am posting relying on memory - I'm not googling or checking wikipedia. But even were I to be, it's possible I might have a debate with any info garnered in that manner, anyway. Historians do disagree.

I am not able to debate via links - checking links and assessing reliability - there's a time factor in all of that, unfortunately. I can debate you - how you think about things. I think that's fair.

No man never be afraid to post in any thread.. yeah the arguments can get heated now and then but its not personal ever.