Letter: Why Gold and Silver?

Thank you for your website. I am only now beginning to read through it and so far I am finding it excellent. I have been meaning to ask this survival-related question and maybe it will spark some interest on your blog: Why bother with gold and silver? As far as survival economy goes, I understand that things with intrinsic value such as fertile land, water, manpower, armamentaria , food, and medicines will be useful for trade for the simple reason that they are valuable items. Gold and Silver may be very handy if the global, stable
economy is restored since the WHOLE WORLD rarely goes into a tailspin at the same time; and the return of a stable economy will mark the return of the value of precious metals. But I can tell you that before that, maybe a dentist can find intrinsic value in gold/silver for filling cavities. But unless two people agree that your 10-dollar-gold-piece is worth anything it is almost valueless. Also, related to the above, people being people with weaknesses means that there will still be a market for ‘non-essential items’. A review of war-torn Europe after the 20th Century world wars shows that three items in particular that were the hottest black market items: alcohol, cigarettes, and chocolate! For folks like you and me who can live happily without any of the three, they are almost a source of surplus wealth! If I wanted something from you I know I’d need to fork over some service, or tool, or ammo etc. But to the ‘regular, unprepared’ population- and some will indeed survive- you could make a great friend with a litre of cognac and a box of cigars! (Based on historical example, anyway.) Anyway, I can accept that I missed the published reasons for precious metals retaining value in WTSHTF-survival-economies because I am somewhat new to the arena. But I would like to know why gold and silver are expected to remain valuable. Thanks in advance for your, and anyone else’s, time. – Dr. P.R. Ophylaxis, Athens, Greece

JWR’s Reply:

To begin, I DO NOT consider gold and silver particularly good barter items for the depths of an economic collapse. Rather, I consider them a sort of “time machine” vehicle to preserve wealth from one side of an economic collapse to the other. (Something that almost certainly no paper currency will do.) As I pointed out in the Barter Faire chapter of my novel Patriots, even small gold coins are much too compact a form of wealth for day-to-day barter transactions. however, easily recognizable silver coins (such as pre-1965 mint date U.S. 90% silver dimes and quarters) might have some utility for barter. But in the very depth of the chasm, only truly practical items like common caliber ammunition and canning lids will be in great demand as barterables. The greatest utility for gold and silver will be in the later recovery phase, and post-recover–again, as a time machine. Perhaps someday you’ll have the chance to trade a dozen one ounce Krugerrands or American Eagles for a ranch house on 40 acres.