Exit strategy and smaller amounts of silver

[Ryansilver]

Hi everyone, 

From Australia, only just started researching PM's in the last month or so.. my question is in the event of an economic downturn where the price of silver rises dramatically, will any dealers or anyone even want to buy silver at such high prices? If the dollar totally collapses and fiat currencies become worthless then I can understand the value of having silver since its purchasing power would be through the roof but what about in a situation where the economy experiences a deflation/recession that it relatively quickly recovers from? Holding onto silver doesn't seem very beneficial in that situation if you wouldn't be able to sell it when its price rises.

Second question is, in the case of a complete collapse where the currencies are destroyed, wouldn't it be beneficial to have quite small denominations of silver since its purchasing power would be enormous? If the smallest you have is a 1 ounce silver coin, how would you by things like (the cliche) a single loaf of bread?

[Pohaku]

I'm something of a noob, but for things like gold, silver, bitcoins, and antique paintings - the price is more or less a reflection of 'what someone is willing to pay you for it'.  So if the price of silver 'rises dramatically', that means by definition that people are willing to pay those high prices for it. If they aren't - then the price hasn't risen. At least that's my layman's understanding.

As for denominations - well if you're in a world where people are actually using silver to purchase goods, without any use of fiat currency (and its relative value) as an in-between, then sure - small denominations clearly more useful. To be honest, if things got to that stage, I think you'd be better stacking flour, eggs, vegetable seeds and antibiotics 'cos they'd have much more purchasing power than silver coins. 

I think good advise is to diversify, in any case? My 'apocalypse' stack is divided into considered ratios of silver, gold, cryptocurrency, and cash. Sadly, I don't have enough of any of 'em, yet!

[Ryansilver]

I saw some posts recently in the comment sections of some YouTube videos that said something along the lines of dealers not wanting to pay the higher prices for PMs since they would essentially lose out as the price would go up quickly and only for a short time but come right down and stay there for a while since the peaks are short lived meaning they would lose a lot of money.

My apocalypse stack 😂 I definitely don't have enough of 'em either!

P.S. come to think of it of course food will have a lot of value but if there is no currency, silver will definitely act as money and have a load of purchasing power but thanks for the response!

[AppleZippoandMetronome]

One important point...  when the fiat currency faces inflation the purchasing power of your silver doesn't go up when it comes to general goods. It would only go up against the fiat currency. The intrinsic value of all other things would remain relatively the same - it just takes more fiat to buy them.

In a complete collapse situation your silver probably won't help you very much at least not until you can get out the other side of it. As things get bad the basics needed for survival will become more valuable than something like silver.

[Kman]

Price rises with demand

You would struggle to be able to buy physical silver and if you can it will have a healthy premium on top - selling it would be the easy part

In a crisis precious metals will help you hold onto your wealth until things blow over, I don't know if they will be much good during the crisis

 

 

[Ryansilver]

24 minutes ago, AppleZippoandMetronome said:

One important point...  when the fiat currency faces inflation the purchasing power of your silver doesn't go up when it comes to general goods. It would only go up against the fiat currency. The intrinsic value of all other things would remain relatively the same - it just takes more fiat to buy them.

In a complete collapse situation your silver probably won't help you very much at least not until you can get out the other side of it. As things get bad the basics needed for survival will become more valuable than something like silver.

That goes against what I have researched recently.. if the currency faces inflation people will rush to real money aka gold and silver driving up the demand making it more valuable no?

Your second point, if silver won't help you very much during a crisis then whats the point of holding it at all? Isn't it during crisis the PMs become more valuable? Nobody buys precious metals historically when the economy is fine and prosperous because there are much better investments that make more money.

[Ryansilver]

21 minutes ago, Kman said:

Price rises with demand

You would struggle to be able to buy physical silver and if you can it will have a healthy premium on top - selling it would be the easy part

In a crisis precious metals will help you hold onto your wealth until things blow over, I don't know if they will be much good during the crisis

 

 

They are the original money man, in crisis they will help you purchase essentials. They are a tool for exchange. Maybe not in the dead centre of war but i don't know how bad things could get. That was my impression

[Martlet]

In a real currency collapse, most likely a new currency will come into place.  In the scenario of complete government collapse, Mad Max style anarchy, no idea how well silver would work. It rarely if ever happens.  We see countries in war, collapsed economies all the time and they use other currencies. See Syria civil war, Daesh trading with dollars. 

[AppleZippoandMetronome]

11 minutes ago, Ryansilver said:

That goes against what I have researched recently.. if the currency faces inflation people will rush to real money aka gold and silver driving up the demand making it more valuable no?

Your second point, if silver won't help you very much during a crisis then whats the point of holding it at all? Isn't it during crisis the PMs become more valuable? Nobody buys precious metals historically when the economy is fine and prosperous because there are much better investments that make more money.

I think you need to do more reading as there is no shortage of examples at this point in history of countries that have collapsed and time and time again what becomes truly valuable are the basics needed for survival. Your silver won't keep you alive. If a population is starving and there is a shortage of food that food will be infinitely more valuable than all the silver in the world. These are basic life realities.

I get that a there is a lot of rhetoric out there going on and on about silver shooting to the moon and being the currency of the future, etc. There is nothing to indicate that this is particularly realistic though and most of those messages are brought to you by people with an agenda whether they be silver dealers or selling books or whatever on the subject. Realistically silver is a store of value and will protect you from inflating currency. If SHTF there are things and skills I'll be much happier to have than my pile of silver

[5huggy]

1 minute ago, Martlet said:

In a real currency collapse, most likely a new currency will come into place.  In the scenario of complete government collapse, Mad Max style anarchy, no idea how well silver would work. It rarely if ever happens.  We see countries in war, collapsed economies all the time and they use other currencies. See Syria civil war, Daesh trading with dollars. 

Part of the reason for the war in Iraq was because Saddam would not "toe the line" and had announced he was going to "create a GOLD BACKED currency"

So who was first to INVADE Oh yeah (US) - with a pack of lie's as an excuse (WMD ?? where are they ) 

followed and backed up by the idiot we had in charge at the time "BLAIR" - who made shoot loads off the back of it! 😡😠

[5huggy]

5 minutes ago, AppleZippoandMetronome said:

If a population is starving and there is a shortage of food that food will be infinitely more valuable than all the silver in the world. These are basic life realities.

Quite right buddy 👍

However , those with "Grub" won't want a failing/failed currency but you could buy "Grub" with Silver/Gold - that's how those type of peeps get "RICH"  - IMHO

[Ryansilver]

19 minutes ago, AppleZippoandMetronome said:

I think you need to do more reading as there is no shortage of examples at this point in history of countries that have collapsed and time and time again what becomes truly valuable are the basics needed for survival. Your silver won't keep you alive. If a population is starving and there is a shortage of food that food will be infinitely more valuable than all the silver in the world. These are basic life realities.

I get that a there is a lot of rhetoric out there going on and on about silver shooting to the moon and being the currency of the future, etc. There is nothing to indicate that this is particularly realistic though and most of those messages are brought to you by people with an agenda whether they be silver dealers or selling books or whatever on the subject. Realistically silver is a store of value and will protect you from inflating currency. If SHTF there are things and skills I'll be much happier to have than my pile of silver

I mean there's conflicting info everywhere I don't know what to think.. Why are you on the forum? Im not saying you are wrong but at what time will silver ever be worth having if what you say is true?

[Kman]

44 minutes ago, Ryansilver said:

They are the original money man, in crisis they will help you purchase essentials. They are a tool for exchange. Maybe not in the dead centre of war but i don't know how bad things could get. That was my impression

In what type of crisis will people want to be swapping silver for essentials?

I can't imagine a situation where currency becomes useless and a starving hoard  watch me enter a bakers with an oz of silver to buy the bread whilst they watch on politely wishing they had some silver 

 

[AppleZippoandMetronome]

18 minutes ago, Ryansilver said:

I mean there's conflicting info everywhere I don't know what to think.. Why are you on the forum? Im not saying you are wrong but at what time will silver ever be worth having if what you say is true?

You're not alone with not knowing what to think. A lot of it is speculation so all you can really do is absord as much information as possible and decide what seems best to you. Its worth looking at all sides and its worth finding out what people have to gain by delivering certain messages.

I see silver as a store of wealth - that is why I bought it. Fiat inevitably deflates so over time your cash buys you less. My silver should hopefully give me a chance of preserving that wealth and not losing value over time like cash will. I'm here on the forum to learn and absord information - none of us are experts in this especially with the world as volatile as it is - none of us have all the answers and not all of us will be right with regards to what we think will happen. I distrust "make believe" which includes fiat money and choose to put my own earned cash in to physical assets which to date is property including land, gold and silver.

EDIT - thought it was worth adding I don't think silver is entirely useless in a collapse situation. If you can relocate with the silver or just make it to the other side of the collapse you can exchange the silver for whatever the adopted currency winds up being and start over. Anyone who had money saved in the currency that collapsed will have nothing.

[StackerCollector]

In 2011 you were able to sell generic silver ounces (not even limited mintages) on ebay for 50 euros a piece. There's always someone who thinks the price might go even higher. And if an ounce goes for £200 hypothecically speaking, you will be able to sell it on ebay to someone who thinks the price might hit 250 or more.

[seasidestacker]

3 hours ago, Kman said:

In what type of crisis will people want to be swapping silver for essentials?

I can't imagine a situation where currency becomes useless and a starving hoard  watch me enter a bakers with an oz of silver to buy the bread whilst they watch on politely wishing they had some silver 

 

of course if 'currency becomes useless' the baker would not be paying his staff or bills, nor would he be purchasing materials to make the bread. best to hunker down and emerge after the 'starving hoard' have eaten each other ( couple of weeks max ) .

[Kman]

2 minutes ago, seasidestacker said:

of course if 'currency becomes useless' the baker would not be paying his staff or bills, nor would he be purchasing materials to make the bread. best to hunker down and emerge after the 'starving hoard' have eaten each other ( couple of weeks max ) .

yep but that's my point, silver would be a good store of wealth until things calm down, but not during I don't reckon

Unless someone can explain a specific scenario otherwise 

[Ryansilver]

17 hours ago, AppleZippoandMetronome said:

You're not alone with not knowing what to think. A lot of it is speculation so all you can really do is absord as much information as possible and decide what seems best to you. Its worth looking at all sides and its worth finding out what people have to gain by delivering certain messages.

I see silver as a store of wealth - that is why I bought it. Fiat inevitably deflates so over time your cash buys you less. My silver should hopefully give me a chance of preserving that wealth and not losing value over time like cash will. I'm here on the forum to learn and absord information - none of us are experts in this especially with the world as volatile as it is - none of us have all the answers and not all of us will be right with regards to what we think will happen. I distrust "make believe" which includes fiat money and choose to put my own earned cash in to physical assets which to date is property including land, gold and silver.

EDIT - thought it was worth adding I don't think silver is entirely useless in a collapse situation. If you can relocate with the silver or just make it to the other side of the collapse you can exchange the silver for whatever the adopted currency winds up being and start over. Anyone who had money saved in the currency that collapsed will have nothing.

Solid, sensible answer. Thanks for the reply 🙏

[Ryansilver]

Thanks for the replies everyone 🙏 I think I understand it a bit more than before