A run on the bank?

[Antilogic]

Exactly. When everything breaks into chaos, everyone's waiting to buy your gold! You can eat it, too!

Yeah, you'd be much better off with your fully-customized and provisioned doom bunker! You know, to store all that gold in, so people won't steal it!

 

[Tahuti]

Exactly. When everything breaks into chaos, everyone's waiting to buy your gold! You can eat it, too!

That's not the point, since paper money isn't more edible than gold either. Gold represents value, because there isn't much gold around. In the (highly unlikely) event of total currency collapse, gold is probably the best interim currency.

 

[innonimatu]

Exactly. When everything breaks into chaos, everyone's waiting to buy your gold! You can eat it, too!

No one can know what kind of interim currencies will be usable during a crisis. But gold does have a history of being useful. You can bet on what you wish. I'm only saying what I think more likely to happen: people tend to follow estabelished patterns.

 

[Ajidica]

That's not the point, since paper money isn't more edible than gold either. Gold represents value, because there isn't much gold around. In the (highly unlikely) event of total currency collapse, gold is probably the best interim currency.

If things collapse that far, why will gold retain value? Outside of electronics and technology, gold is only valuable because it is rare and shiny, neither of those characteristics are particularly useful in a complete collapse of civilization. You are better off stockpiling basic machinery, lubrication oil, canned food, bottled water (or lots of water filter pads), gas, generators, guns, ammo, fertilizer, hand plows, seeds, a good set of knifes, and survival skills.

 

[SKILORD]

Which is why the Chinese will invade, America's huge stockpiles of Gold and lack of food or water, a bankrupt military and a civilian government that cant even make good on its debts. And the Maoist Province of America will be born and then who has the yuan? Which he bought at a devalued price mind you!

 

[Quackers]

How exactly do you have a bunch of yuan on hand if the banking system collapses? You move to china and open a bank account there? You get chinese paper money? Who'll take your yuan in your country?

Every asset which does not have a physical existence and is under control of the owned can easily be wiped in a systemic crisis. Bonds, stock, accounts in foreign currency, etc are now almost all held through funds belonging to financial institutions, which are the same institutions now feared to be bankrupt. If one such institution does go down, who owned the title to that paper? Does it exist at all, or may it have been fraudulently represented in the balances of the institution?

And, of course, all non-movable property is likely to get taxed to hell.

Thus, I wouldn't be surprised by another run for gold if bankruptcies in financial institutions start happening in slow-motion, instead of a generalized collapse in a single day with immediate state intervention worldwide. But only under those circumstances. It's an unlikely scenario: do expect governments to intervene instead of letting thins snowball.

What currency/resource would you get if anarchy struck?

 

[innonimatu]

If things collapse that far, why will gold retain value? Outside of electronics and technology, gold is only valuable because it is rare and shiny, neither of those characteristics are particularly useful in a complete collapse of civilization. You are better off stockpiling basic machinery, lubrication oil, canned food, bottled water (or lots of water filter pads), gas, generators, guns, ammo, fertilizer, hand plows, seeds, a good set of knifes, and survival skills.

You meant that you ant to go survivalist? That's a very modest plan you propose.

Or do you mean stockpile those items as some form of "wealth preservation" mechanism, stockpiling in order to sell during the crisis?

I'm guessing the later. "Wealth preservation" certainly seems to be the worry of the people pulling money out of banks, not mere survival (we're not expecting a Mad Max scenario). But then, if you go with stockpiling goods as wealth, a question will quickly arise: you'll sell those during the crisis (that's the plan, right?)... in exchange for what? Oh, for some form of currency... and I bet that, in the early stage at least, it won't be the paper kind.

Now you understand why I guess that the tradition crisis-time currencies, of which gold is one, will usually be good bets? Relative values, of course, are anyone's guess. And (among other reasons, because of that uncertainly) no, I'm not trying to give financial advice to anyone. Merely justifying my original opinion that a run for gold won't be surprising.

 

[kronic]

US bonds (remember, you don't have to buy your own country's bonds) are doing shockingly well, despite the credit downgrade. I wish I moved more of my money into them before the debt ceiling debate, but live and learn.

You're missing the point. If things get really nasty, the US will not default but pushing the inflation button really hard. Good luck with your well-perfoming bonds then. Bonds in this situation = no store of value.

What currency/resource would you get if anarchy struck?

Currencies as in paper money? None. In a real anarchy, you need stocks of food and water, live in a strong community that knows how to defend itself and where to get food from. If you bought gold, you stand a chance of converting it into a new currency after anarchy is over. Gold is for the time after, not for the immediate trouble. Paper money will be worthless in anarchy and after it.

 

[Tahuti]

If things collapse that far, why will gold retain value? Outside of electronics and technology, gold is only valuable because it is rare and shiny, neither of those characteristics are particularly useful in a complete collapse of civilization. You are better off stockpiling basic machinery, lubrication oil, canned food, bottled water (or lots of water filter pads), gas, generators, guns, ammo, fertilizer, hand plows, seeds, a good set of knifes, and survival skills.

I said total monetary collapse, not total collapse of civilization which is even more unlikely. Besides, why a pure barter economy (with all its waste and inefficiencies) when you have a valuable stand-in?

 

[Thoughtful Thug]

Which is why the Chinese will invade, America's huge stockpiles of Gold and lack of food or water, a bankrupt military and a civilian government that cant even make good on its debts. And the Maoist Province of America will be born and then who has the yuan? Which he bought at a devalued price mind you!

Why would the Chinese invade? All they have to do is tell our government to invade a landlocked Central Asian country, so it can open its natural resources to them. Oh wait... it already happen in Afghanistan.

 

[GoodGame]

I understand what you're saying, but this is doomsday scenario stuff, investing in gold and "seed rations" or whatever apocalyptic stuff is getting sold.

In such a doomsday scenario, if you're planning for the collapse of the capitalist banking system, I think I would like to have a bunch of Yuan on hand rather than gold. I'm not going to be making superconductors, I have very little use for gold.

my bad on spelling.

Excellent point. I always thought that being a gold bug really only inflates the net worth of the middle men who stock gold. Gold mining would be a better investment if gold really had intrinsic worth beyond manufacturer and luxury goods. And if governments go back to gold-backed currency, then you can bet that they will dictate the value of the gold, how much is on the market, etc... so your investment will be at their mercy. I have seen gold do well relative to the market, especially when the market has a sudden drop, but isn't that just temporary as people lose confidence until the market reverses?

Shifting your assets to real economic value makes sense to me. If you can't trust your currency then it makes more sense to invest in owning your own share of productive economy (invest in a farm, an essential business/service (e.g. mechanics shop, gunsmith, learn a second trade), etc..) something which will always have value as long as the market can afford the service/good or isn't over-saturated with that service/good.

 

[Antilogic]

You're missing the point. If things get really nasty, the US will not default but pushing the inflation button really hard. Good luck with your well-perfoming bonds then. Bonds in this situation = no store of value.

No, I don't think I am. If you are concerned, right now, about storing value because of problems in the Euro, the US dollar might be a good hiding place. This advice does not hold nor was ever meant to hold if the US dollar is in trouble.

 

[Verbose]

Buy some land. You can always grown potatoes on it.

 

[Snorrius]

I think this is an overreaction, when was the last time people losst all their money in the bank account ? OK, my parents lost all the money they had in a bank in Yugoslavia in the nineties (an estimated €20.000 adjusted for inflation) but civil war is a special case.

Every time it is a special case but if you look at history it gets pretty repetitous.

 

[SeekTruthFromFacts]

I don't know why they'd drop the peg so long as the balance of trade stays the way it does, especially with a weak dollar.

The current non-policy is to revalue through inflation. That way Beijing is not seen to back down, but the global economy can rebalance a bit. Plus everyone likes rising wages.

 

[Thorgalaeg]

Gold is very pricey lately. What about silver, platinum, palladium or even rhodium?

 

[Leonel]

I'd eschew gold in favor of weapons and tinned food.

I think this is an overreaction, when was the last time people losst all their money in the bank account ? OK, my parents lost all the money they had in a bank in Yugoslavia in the nineties (an estimated €20.000 adjusted for inflation) but civil war is a special case.

On a related note : Part of the reason for Germany's relatively strong economy at the moment is that the notoriously frugal Germans are spending more than usual because they don't trust the banks with their money any more.

I'd do cigarettes and maybe chewing gum too. If it gets bad enough to use those weapons, simple pleasures like a cigarette or gum will be luxury items.