There are many reasons that the price of gold has gone up so much over the past few years.
One reason is that the developing countries (especially India) is buying more gold as these countries become more wealthy. Another reason is that it’s a scarce resource so naturally as the population all over the word grows, people will naturally accumulate it whether they know it or not. By this I mean that there are sometimes trace elements of gold used in electronics (especially older PCs) – a very, very small amount but there nevertheless.
Another reason that gold is rising so quickly is the believe that in a mass destruction, end-of-the-world scenario, gold will be the only investment that holds value… And to be honest, it will hold value! The governmental currencies (especially the ones with a fiat currency) will be worth less than the paper that it’s printed on (since the paper no longer makes a good writing surface). But I have to wonder is the end-of-the-world folks acquiring the most valuable assets? What about water?
Wouldn’t water and canned goods along with MRE a more valuable asset? Or even metal like guns and knives? Not to mention blankets, clothes, shoes, horse (no infrastructure means no gas…) and water… lots and lots of water.
Of course to get the system moving again, practically everybody would either barter, write IOU notes, or use gold. Gold is the lowest common denominator and practically has a universal value versus fiat currencies, and personally I wouldn’t want an IOU from anyone.
What if water was contaminated or restricted in flow? In addition to the desert states obviously in trouble, potentially so could all the other states.
I wonder if those houses with solar panels would somehow be a critical part to the recovery of a destroyed society? After all, if somehow the utilities companies were destroyed, those houses outfitted with solar panels would be able to provide electricity for small-scale manufacturing. Perhaps even powering the pump for houses still fitted with water wells.
While you never know what will happen in the world, personally I’m not concerned about doomsday scenarios… but perhaps it wouldn’t be a bad idea to get a month’s worth of cans and bottled water (especially if you already buy bottle water for consumption).
Thanks for readying my meandering thoughts today,
MR
How funny…I was just talking to my dad about this a couple days ago! I said that I don’t plan on investing in any gold since I don’t believe that if the world’s economy collapses that anyone will care about gold and silver. He disagreed with me, but when I asked him if he was starving, would he rather me give him a loaf of bread or a gold necklace, he said he would take the bread but then try to convince me to give him the necklace too. He’s such a smartass…;)
lol, gold has a perceived value beyond our paper money, but I would take the bread first (or water).
In such a scenario I don’t think people would care too much about gold either. It would all come down to the more useful things such as food, water, fuel, etc. If a country’s economy were to collapse without any doomsday, I could see gold still being valuable though.
There are cultures that don’t care about gold at all. If it were to get real bad, that may be the case…
Hmm interesting. I think life would def be more commodity driven. Water would be up there but it’s such a hard thing to keep constant. Stuff like gold is measured by weight, has lots of applications, carries a value stigma, and won’t deteriorate over time (water can get dirty, spilled, etc. ) So while I think it would be up there, it wouldn’t be THE standard I don’t think. As a strategist though it is kind of interesting to see what someones networth/business might look like made up of all commodities – maybe Flintstone-esque
yeah, it would 🙂 Yabba Dabba Doo
I think the things that become more scarce would become more valuable. If all the water is contaminated, I see it rising if value instead of decreasing… Basic Supply and Demand…
When I help people to plan for retirement it’s IMPOSSIBLE to get the ‘end of the world, gold lovers’ to understand that Gold won’t be the end-all-be-all to their problems.
New Orleans during Hurricane Katrina is a very good example of this. You couldn’t have offered any of those people gold down there…they wanted food, shelter, and water. Period.
In a collasped economy where chaos will be rampant, there is no doubt life’s essentials will be more important than gold.
Very true! If nobody want gold (and why would they if they are trying to eat and drink to survive), then it’s worthless to some degree.
This is the exact question I pose to anyone who says that Gold has intrinsic value…it doesn’t but a gun certainly does LOL
Yep! Tools would be up there whether it’s a guns, knives or animal traps or shovels and hoes…
Rather than buying a month’s supply of bottled water, why not just buy a 55-gallon storage drum and fill it with water? It’s a much more efficient storage container…
That’s an option too… Currently a lot of people buy bottled water, so the idea of stockpiling the water and rotating the bottles to drink the earliest bought first, they incur no extraordinary costs in the plan over a normal year’s timeframe.
In the beginning of the downfall, food and water would definitely be worth more than gold, but as society began to regain momentum, gold would again gain purchasing power.
I think your idea behind solar panels is stellar. What about setting up a solar panelled home with a water filtration unit? You’d be swimming in barters!
Thanks!
Nice add on the solar paneled home with water filtration unit! 🙂
An overall collapse scenario is fairly unlikely. Extra sources/stocks of water and energy are smart things to have though. Water mains and power lines have been known to go out of service.