Tradeable Currency

[Mauser3006]

In the event of a long term interruption it is a good idea to have a tradeable currency. The problem is trying to work out in advance what that should be.

 

There are many scenarios to consider, but let's take one - a fuel crisis. if there is a fuel embargo on the West by OPEC, (Unlikely? There was one in 1973 when the price of oil shot up from $3 to $12 barrel), or the current crisis in Yemen turns into full blown war between Saudi Arabia and Iran, this could see the price of fuel in the UK soar.

 

Some of the immediate effects of this could be the slowing of food distribution in the UK, the rationing of National Grid power, water rationing etc. Aside from the obvious requirement to have stored food, water and medicine, which all Self-Reliance Practitioners such as our good selves undoubtedly have, what have you got to trade?

 

Ideally you need gold or silver coins, but the problem comes with the premium (the cost above the value of the coins that the dealer adds on). The bigger the item, the lower the premium, so if you want to buy an 'Italian Job' sized gold brick, the premium would be very low, but if you want a handful of gold or silver coins, it's quite high. This means that you have to wait a long time for the market to catch up so that you can sell them back at a profit. (You also don't want to be paying for a loaf of bread with a gold bar worth £1000s!) The great thing is that should there be a mega crash, the value of gold and silver and other tangible goods is likely to soar. There are lots of new companies selling gold and silver online now, which is something that many people are increasingly interested in; it being nicer to have a stash of silver coins in your safe at home than an electronic screen shot telling you that you have X amount of (devaluing) money in the electronic ether...

[brown dog]

Fascinated by this.

 

Suspect there are a few scenarios:

1. 'Wheels fall off' when far from home - and I want to pay to get home.

2. Temporary oil 'glitch'of whatever cause.

3. Banking glitch.

 

My thoughts are along the lines of:

 

1. Much like the adage 'what's the best knife in the world? - the one you have with you'; I suspect the best tradeable 'instant' currency that you might always have with you is a universally recognised posh watch or equivalent that you always wear/have with you.

 

2. Oil glitch - short term, I would think that the best 'tradeable' is energy (petrol etc); followed -longer term- by tradeable food.

 

3. Banking glitch- in the 3 month scenario, I'm genuinely not sure when 'cash' ceases to be of value. Agree the point on internet ethereal cash becoming valueless, but would an 'at home' cash reserve meet the need adequately? I'm not sure where/when the crossover to Krugerrrands kicks in?

[spartan7510]

What about hedge for your pension fund? anyone thought about that?

[spartan7510]

This looks interesting and has some good reviews: https://europacbank.com/products/metals-backed-account/ any thoughts on this? Looks more flexible than hauling physical along, don't take US clients by the looks of it.

[brown dog]

This looks interesting and has some good reviews: https://europacbank.com/products/metals-backed-account/ any thoughts on this? Looks more flexible than hauling physical along, don't take US clients by the looks of it.

 

Whilst supposedly 'real'; it's still, from a punter's perspective, totally 'in the ether' isn't it?

[spartan7510]

The owner of the bank - Peter Schiff has a solid background and is often on television. He has written many books and predicted the housing market crash 2008. He is an outspoken critic of Keynesian economics, having come from Austrian school of economics. Though It is always risky offshore, it has its pros and cons. As for been in the “ether”, I think most banks in the ether and your currency saved is merely digital numbers on a computer screen. Diversify would be best, I don’t trust EU banks after Cyprus style bail-in, especially when a number of large UK banks are rated one above junk status…

[Orka Akinse]

The thing is.... you need a currency (no matter what it is) that talks. Gold silver and diamonds enjoy a totally international language that speaks any language either locally or internationally.

 

I've yet to meet anyone on any intellectual level that doesn't understand the value of gold therefore it is sensible to me to have some to hand. it need not be Krugerrands, I have a stash of gold in coins, necklaces, rings etc that I can talk with. If your planning for only 3 months then it need not cost an arm and a leg to stash.

[John MH]

In what scenario in the UK would Stirling not be tradable? If we have descended to those depths then something more dense than currency (gold or silver) will have more value.

[Akeld]

Supposedly, the travelling community do not trust banks and wear their currecy, hench the thick gold chains/bracelets and sovereign rings

[brown dog]

In what scenario in the UK would Stirling not be tradable? If we have descended to those depths then something more dense than currency (gold or silver) will have more value.

 

That's the point that puzzles me:

 

3. Banking glitch- in the 3 month scenario, I'm genuinely not sure when 'cash' ceases to be of value. Agree the point on internet ethereal cash becoming valueless, but would an 'at home' cash reserve meet the need adequately? I'm not sure where/when the crossover to Krugerrrands kicks in?

 

In the less-than-doomsday scenario; wouldn't a stash of tenners serve the same purpose and be easier to use?

[Chris-NZ]

I looked at getting a quantity of gold but there are two issues that should be considered. Firstly, for security reasons, you need to be able to buy it in essence anonymously so the storage address isn't easily traceable. You don't want a burglar calling, or worse, being held up. If you choose to have it stored, there is always the risk that, "come the revolution" or financial markets' collapse, it isn't retrievable.

 

Secondly, there are potential insurance issues with holding bullion. It would almost certainly alter your risk profile on various fronts.

[spartan7510]

 

That's the point that puzzles me:

 

 

In the less-than-doomsday scenario; wouldn't a stash of tenners serve the same purpose and be easier to use?

 

Short term I think some cash on hand, long term preservation of wealth - gold, diamonds, silver ect.... There has been a lot of talk about a global currency reset coming soon on the alternative media, things the main stream will not tell you until the last moment when its too late. Key is to diversify a bit cash, food, gld, slv ect...

 

http://www.shtfplan.com/headline-news/a-global-financial-reset-is-coming-a-deal-is-being-made-between-all-the-central-banks_04052015

[gbal]

Investment is vanity

Consumables are sanity

Cash is king

[Ronin]

I would have thought that a short term "blip" would have a zero change effect in useable currency.

 

Longer term - things would probably evolve to a barter system.

[terryh]

Personnally I think this is on the edge of the purpose of this section of the forum?

 

The point at which financial collapse has happened i.e. your local currency is of no worth, then you are in for a pile of poo, so basically have some cash on hand, once this is of not use then barter is it, so you will need items to barter, excess food, rabbits you've shot etc.

 

If you are aborad and the wheels drop off gold's no use unless you can find a private individual to transport you. If you're in the UK away from home then cash or perhaps 'aquire' a method of transport? there will be a lot of people in the same predicament.

 

Total failure of supply will not take long to reduce things to a mess, it took no time at all for things to degenerate into chaos in New Orleans after Katrina hit, less than a week and that was localised. I was in Florida at the time and just trying to drive back to Texas was a serioius concern/effort/plan just avoiding the area effected with 2 children and a wife.

 

T

[spartan7510]

Investment is vanity

Consumables are sanity

Cash is king

 

"After all, in a credit crunch, cash is deemed to be king. In which case, gold owned outright has just been crowned emperor." - Adrian Ash

[Davy]

If society is at the stage where folding stuff is no longer acceptable then surely gold is going to be of very little value either. I would have thought barter items such as ammunition and prescription drugs were of more value. There would be cases where an Asthma inhaler or a course of Anti-Biotics would be worth far more to than 10 gold coins.

[hughes.s]

My parents in 1941 had chickens, rabbits, a cow, and of course an unlicensed pig.

 

Hughes.s

[spartan7510]

If society is at the stage where folding stuff is no longer acceptable then surely gold is going to be of very little value either. I would have thought barter items such as ammunition and prescription drugs were of more value. There would be cases where an Asthma inhaler or a course of Anti-Biotics would be worth far more to than 10 gold coins.

 

If you were in Cyprus when they had the bail-in and stole citizens money, would you have been better off with savings in your own hands in Gold or with your money in bank? Bank notes is not money it is currency, it has no intrinsic value in itself, Gold, Silver has been money (real money) for the past 6000 years. Every Fiat currency in history has failed....

 

Now concerning bank notes, if hyperinflation kicks in what use is the folding stuff? This is a very real scenario, since printing money (Quantitative easing) as they have been doing does nothing than debase or devalue the currency. Do you think the people in Zimbabwe would rather have GLD or paper money? Or how about the Weimar republic where people were hauling around wheelbarrows full of money to buy a loaf of bread. I read an article where there was a woman in Argentina back around 2000, She had enough money in the bank - cash to buy a house outright and was due to draw the money out to buy the house. there was a bank holiday declared, bank shut and currency devalued to point where when she did manage to get her money out, she could only afford a family car.

 

From what I have read is have about 6 months of cash on hand to pay for rent, necessities. The rest invest in Food, water, Gold, Silver, self-defence. Robert Kiyosaki talks about the 3 "G's" - guns, gold and a getaway plan (thats the US perspective)

[Mauser3006]

 

If you were in Cyprus when they had the bail-in and stole citizens money, would you have been better off with savings in your own hands in Gold or with your money in bank?

Wasn't this one of the most incredible things to happen in our time, yet received only a little coverage at the time. To have the Government step in out of the blue and say "we are taking 10% out of everyone's bank account"! It makes me nervous.

[meles meles]

An interesting point indeed.

 

We guess that most people keep any savings they may have in a bank for perceived physical security. Perhaps the shooting community is a little better placed in that we are used to providing physical security for our guns and thus actually have quite a secure facility in our homes where cash could also be held rather more securely than in the sock drawer or under the mattress. As most accounts these days return no interest worth speaking off, a bundle of tenners in the ammo locker might not be as daft as it would seem to many.