Friday, March 29, 2013

golden savings


GOLDEN SAVINGS

I was going to give you part two of Kamikaze Ben today, going into a bit more detail on what items could be taken from Americans during an engineered collapse to sell to the Chinese to enrich our fearless leaders.  But I think that can wait until next week.  I was reading the article on Rawles today about being your own banker ( a rather better than usual article )  and something so spectacularly wonderful, insightful and brimming with groovyness popped into my mind I simply had to share it with you.  Yesterday afternoon I was peddling home and I got to thinking about my upcoming major bicycle repair.  That big ass wheel between the pedals, the one that turns the chain ( don’t ask me to name most parts.  Beyond “that thing” or “the doohickey” I have little idea ) is nearing six thousand miles, three and a half years of riding, and the teeth are worn out.  To get the bike store guy to change it ( at the same time doing the ball bearings inside and what-not ) was going to be $200.  Why not just add an extra $100 and change over to my ideal bike, a coaster bike or single speed?  I did toy with going with a Wal-Mart bike, but after I had to buy new quality wheels and tires and chain in three to four months I wouldn’t have saved any money, and gained extra stress.  I’ll just pay the bike shop guy a premium of $75-$125 ( shipping is going to be extra ) and buy quality to start out with.

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I think that the reason all this came to mind ( I did go ahead and order/pay for the bike today before I changed my mind ) was the worry of the bank accounts here being “Cyprused”.  I went ahead and followed Nightshifts advice and started withdrawing all unnecessary money from the checking account each and every payday.  And while I need money on hand, I don’t need money if it can be invested in tangibles, such as a mode of transportation that will not only eliminate a monthly bill, but be the cheapest possible answer ( I anticipate my $100 premium will be paid back in less than a year from the saving of not having to maintain a multi-speed bike-no more labor and parts for brakes, cables or derailers ).  And all this cheaper bike pondering along with the Rawles article mentioning the standard “one quarter of savings in gold or other precious metals” ( as if there are any other than silver unless you stock pre-82 pennies, a strategy much smarter than nickels because in the future they can’t be smelted for their copper ) got me to thinking a bit more on gold.  I’ve said before ( and it isn’t my own idea, obviously ) that gold is a vehicle to transfer wealth through crisis, not an investment.  But now I’m thinking that gold is actually LESS liquid than that.

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Here are my thoughts.  Gold and silver will soon be running out, insofar as proven reserves in the ground.  The vast majority left in the ground is in such minute quantities that extremely large and complex machines are needed to extract an once from a ton or more of dirt and rock.  This isn’t something that can be done by hand or by 19th century old timey technology.  They need giant machines burning giant amounts of diesel using huge quantities of grid power.  It is an Industrial Age process.  As the Industrial Age comes to a close with the end of cheap and abundant oil, this way of mining must come to an end.  So it is safe to say that there might be years left of global precious metal mining left, but certainly not decades.  The above ground supply is not going to grow by very much.  Hyper-inflation might put upward pressure on gold and silver prices ( although held down with central banker derivatives manipulation for now ), and is the major factor, but diminishing supplies also don’t help ( please don’t argue that X mine has twenty years left.  I’m not arguing about one region, but about global supply in total ).  If the supply isn’t going to grow all that much, and inflation continues, and the growing economies in India and China keep producing more middle class families even as ours shrink, the time to buy precious metals, if you are so inclined as a means to diversify and safeguard your wealth, is now and that window won’t stay open all that long.

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However, a caution.  When the gold supply was last miniscule and unable to grow, only kings ever saw gold.  And silver, while not as scarce, certainly never was traded outside the wealthier segments by and large.  The 90+%ers used barter and nothing else.  Anyone owning gold and silver in the future will certainly be much larger targets of theft than today ( and theft will be a lot more violent ), but beyond that I would view precious metal as an Industrial Age product, just like ammunition, that can never be made again.  If you get rid of your precious metal, you almost certainly won’t ever be able to replace it.  Which means that you had better have plenty of cash on hand for the start of the collapse, and plenty of barter items you won’t personally miss for later.  Never plan on selling your precious metals for emergencies.  They should be viewed as something that just gets inherited generation after generation, like land.  Once it is gone, it can’t be reclaimed.  Look at farmland in areas that are small like Switzerland or Japan.  The land costs far more than several generations worth of food.  Once one family member sells, none can ever replace it.  Gold is damn high now, but still butt cheap compared to historical standards.  Like ammunition, or machine grown wheat, you will never be able to have this kind of bargain again.  So don’t act as if your metals are liquid assets.  They are a once in a family dynasty chance that won’t be repeated.

END
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16 comments:

  1. From what I understood, liquid assets have to be fractionable and have intrinsic value.

    I think in Africa they have very thin gold bracelets, all with the same (low) percentage of gold, and thus you have little intrinsic value. Forget about 200+ USD godl coins.

    One product that caught my attention lately are USB flash cards / USB sticks / SD cards. Internet is a network, and if it goes down, people will still need a way to exchange data.

    There is little that can go wrong with USB sticks. Compared to their use value, they're pretty sturdy things.

    So, a bulk purchase of USB sticks would make sense, I guess.

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    1. Certainly, a good idea. Of course, a time sensative product like car batteries and alternate energy generators.

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    2. Oh you Betcha...USB sticks lol Christ on a fucking crutch !
      Let me think about that one...hmmm no grid, no more techno industry, PC's, Laptops, I-Pads etc that disintegrate after a couple years or maybe five if ur lucky. Yup those memory sticks will be real valuable snark har-D-har har.
      A way to store and exchange data ? Me thinks the lowly pencil and paper will make a huge come back.

      Now on the other hand you hit the nail on the head with batteries James. Trick is get ones that have not been used without the acid added. Shelf life is indefinite this way. Just add the acid when ready for use. Now that, will be money in the bank!!

      Shoot, now I gotta figure out what to do with all these damn Nickels. Been toying with the idea of using them for making nickel / iron batteries. Dunno how the copper in them would interfere with the electrolysis...

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    3. USB's, in moderation because of the time sensitive readers/electric gennerators, is still a good idea. You don't want a thousand, just a dozen or two. A lot of folks will want copies of gardening books and whatnot. Good reminder on dry batteries. I really need to make a list soon. On the top of course is, Spend Money On Parents And Wife. We'll see whats left over.

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    4. LOL Spud, if your computers disintegrate after five years, perhaps you're shopping at the wrong place.

      Computers are tremendous skill multipliers, and survivalists need all the multipliers they can get, from the very start.

      People using no-frills PCs, on 12V DC outlets for instance, will need ways to exchange data after either the internet is ceases to function, or becomes too expensive, too distant or too tight on censorship.

      Perhaps you haven't know pre-internet computing...

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    5. As long as you understand your force multiplyers have series limitations after post-oil/industry

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    6. Personally, I have the best computer ever devised. It sits squarely on my shoulders and I've been stuffing it full for over forty years.
      Sure, I've got a couple of IBM good stuff desk tops and lots of stixs. Yet I really don't want to rely on any hi tech. Paper is mo betta IMO. Tho I do have much stored in digital also.
      So far as pre-internet commputing...I can use a slide rule, which says volumes about the generation I schooled in ha ha

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    7. Well, that "best computer ever" designed IBM and Microsoft, so how damn good is it?

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    8. Well, I must admit it too has it's faults lol

      Our world is becoming more like a Rube Goldberg machine every day. Our infrastructure and supply lines become more fragile as they become more dependent on new layers of technology.
      K.H.H., comment at survivalblog.com

      Remus says - Military analysts pretty much agree Japan lost the war in the Pacific because they were playing chess while we were playing checkers. Overthinking all but guarantees failure. Engineers will tell you complexity increases as the square of the subsystems involved, or near enough, something survivalists should keep in mind when they attempt to replicate their 'normal' life. And no, being a nice, deserving person with good intentions won't make failure modes go away.

      The cost of maintaining complex systems eventually exceeds the value they provide and fail when they become too complex to effectively manage. A trivial glitch that won't affect fencing, say, will bring down an airliner through propagation. Few systems fail because they're too simple, resilient or robust. Said another way, put your money on the cave man. Or Admiral Spruance.

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    9. Ah, but we could afford checkers. The Japs had to be devious and smart. They couldn't just throw oil and metal at the problem ( otherwise, the thought on complexity are spot on ).

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  2. Because people everywhere are now going to be afraid of being "Cyprused", they will keep their money in cash (since you can't earn diddly in interest anyway). This will be troubling and very alarming to both banks and governments. Look for a big push for a beginning-of-the-end of cash.

    The future is a cashless society. You will buy and sell only electronicly, or you won't be able to buy and sell at all. That will solve their problem of people not depositing their money in banks. And when they need more money, they will simply "Cyprus" some of it from depositors.

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    1. I don't think the banks will survive the first round if we have too big a bank run. Remember, those derivatives have close to zero backing.

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  3. Nightshift here, thanks for the shout out Oh Fair Haired One! I am pretty diversified for being broke, cash, a little silver, brass, lead, blue steel, stored food, some food production, ect. Have a wrench thrown in but I will get it right again. Ave, good idea to put up a few usb sticks. Jim, a small solar set uo may be worth gold, for barter think ceramic filter elements, buckets, garage sale fishing poles, you know the drill. Made another aquaintence that raise pygmy and full size goats. BTW, gold and silver are down now. Gold drooped $160 today...

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    1. Manipulating the price. I gues if you force it down, the PM derivatives don't implode just yet. You know actual demand for the coins is going through the roof.

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  4. Greetings Lord Bison, may your hair shimmer eternally! As far as an investment that pays off NOW, how about a nice, heavy duty Worksman bicycle? American made, heavy duty, and low future maintenance costs. Sell some silver and treat yourself to 15 years of low maintenance transportation. Get a sturdy bike lock as well. The trouble with gold and silver is counterfeiting. The slimy Chinese are selling boatloads of fake coins on Ebay. The legal fakes are stamped "copy" in tiny printing. I bet they are also producing unstamped fakes on the side. The only non destructive tester that I know of is an ultrasonic thickness tester, which needs batteries and calibration. Bring on the reset.

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    1. Should we even be supporting E-Bay? Okay, you need to buy junk land, but the company is a bunch of anti-gun whores.

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