Poised for Recession? Guns or Gold?

[Sixtigers]

Gold or guns?

Wow...crappy choices. I have guns...I can only shoot one at a time.

Gold is too expensive, and my family can't eat it.

We've been stocking away foodstuffs and bullets for the last year and a half...not because I saw anything coming, but because we've always sorted 'prepped', and figured a case of food a month (for stores) and a box of bullets every payday is affordable.

It's sure paying off now. I've got three kids, and enough food and meds stored to feed us all for three months, more if we go to two meals a day.

Now, my only fear is fire. I could lose it all in one swoop.

 

[madcratebuilder]

One thing I don't see people talking about is medical supplies. Bullets and gold don't cure the flu. A pandemic may be the straw that breaks the camels back.

 

[JohnBT]

I want something that pays dividends or interest and none of my guns or metals have paid a thing during the past 40+ years. They just sit there taking up space.

John

 

[30 cal slob]

i think gold is on its way to $2,000 oz. the worst of the fed.gov SHTF is yet to come, with ballooning medicare and social security payments.

i have been advised not to be in possession of physical gold inside u.s. borders. there is a risk that fed.gov will expropriate all gold when (not if, when) the dollar drops precipitously (even from current all-time lows) vs. all other currencies.

if you must own physical gold (vs. financial futures or ETF's such as GLD), buy it in an overseas vault.

http://www.bullionvault.com

as for myself, i have beefed up my gun stash and have standardized my collection for parts interchangeability. a few AR's here (DI uppers), a few AK's there, several Glocks of same model here and there. Lots of magazines, reserve ammo, lots of cleaning supplies.

gun owners who are budget conscious should be cognizant of the u.s. dollar vs. other currencies. as of this posting, all industrial and precious metals commodities are priced in u.s. dollars. the price of these commodities is inversely related to the value of the u.s. dollar. we should keep a sharp eye on what copper is doing, because that drives ammo prices (copper is a major component of brass). until recently, copper has been on a tear because of the huge level of building construction in China (electrical wiring and plumbing). additionally, there are many foreign firearms makes that are imported. as the value of the dollar goes down, the cost of these imports for u.s. consumers goes up.

 

[JWarren]

My take. You may not agree with me, and that is OK.

Coming from a background of being a stockbroker for 15 years, I've always seen Gold as a specialized investment that only fits a small segment of portfolios-- and then a minority position in those.

I still do.


Let's get to brass tacks. Gold has been doing VERY well lately. But it hasn't always. From a purely investment vehicle standpoint, there have been much better vehicles for investment. Gold has always been a vehicle to operate as a hedge against inflation. It has been used in the same role as Real Estate.

Well guess what guys... Real Estate has suffered from over-inflated prices. It has dropped. I was reading a report a bit back that highlighted over a dozen real estate markets in the US that experienced GREATER than a 15% decline in market value in the last year alone (it was an older article--its much worse now.)

ANYTHING that can go up, can go DOWN. Including Gold.


Here's my take on that.

If you want growth with hedge, you need a well-balanced portfolio that spans several investment classes and vehicles. It sounds odd when I say this, but a well-balanced portfolio has parts of it that is bleeding all the time. That loss is off-set with gains in other vehicles and those gains are hedged by the lossing sides.

But then I can get the arguement-- Oh sure-- but what are you going to do when the entire financial markets collapse? My friends... if that day happens, you have a LOT more to worry about than whether you have some gold squirreled away. Your world just came to an end.


Typically, I have gotten the "Gold" arguement from those that are seeking to protect and preserve wealth in the event of an economic collapse. Not disparaging anyone here, but this is derived from a "greed" motive. There's nothing wrong with greed-- but I think that applying it to such an event and using gold is short-sighted.


You aren't going to "make out" with gold in a prolonged "SHTF." You'll NEVER get what your gold is presumably worth in barter during a "SHTF."

Face it... You can't eat gold. You can't plant gold. You can't really make much with gold. When you get to the hiarchy of needs, there really isn't much that gold can do to prolong the human condition.

That saps a LOT of barter-leverage out of gold once a "SHTF" hits.

I've been through a fairly prolonged SHTF in terms of Katrina. We were without power and any modern convienences for 8 weeks. I saw a "barter-ish" economy start in rural areas around here. Gold never seemed to be all that needed. I suspect that similar would be the case in other scenerios.


Now... let's say that we simply have a recession and economic slump. Well, we've been through those before. We will again. That's just the economic cycle. This is where a well-balanced portfolio begins to shine. Even though such as that, I would likely do as well-- or better-- with a well-balanced portfolio than a guy with bullion in his basement. And I would have a more liquid investment if I needed to access the cash value.

Now...


I've seen a lot of the gold buyers go off and buy stocks in "Gold Mining Companies" or in Precious Metals Mutual Funds to fullfill the "gold" area. That seems to fly in the face of an economic collapse. If its that bad, do you really think that you'll be able to access the funds in your brokerage account? Would the companies honor your certificates?


I'm in the school of thought that durable goods are more of a value in a SHTF situation, and cash is king in economic downturns. Even in Katrina's aftermath, paper money was still the preferred method of transactions.

Now, I have to say this regarding money as a whole.

I think that being a stockbroker, you have to have a certain distain for money if you want to be a good one. If you love it, you will let yourself get overly emotional on trades. You can't do that.

Money is a tool. It's a tool that operates as a placeholder of value. It can be bartered to acquire things needed to live.

That's it, guys. Beyond the ability to meet daily living needs, it is only a placeholder for status, self-worth, and security.

The value of any of those things is completely recalculated in either an economic recession or a societal collapse. Likely, your gold is going to experience a similar recalculation of worth. It won't be to your liking, I suspect.


I'll take the economic growth and safety of a well-balanced over a variety of economic conditions. I DO plan for contingencies, but I do so proportionately. After all, a good approach to planning ALSO includes what happens when S- Doesn't- HTF.


Just my take.


-- John

 

[USMCBulldog]

Ammo, fuel, medicines and food. These are the "new gold" if things get really bad. Gold will be essentially worthless in a short term SHTF - people will be trading for ammo, fuel, medicines, and food to meet their basic daily needs for survival. If the S really HTF...then in several years gold will likely be a valuable trade item once a new economy emerges - gold has always been valued and always will be. However, to survive long enough to get to that point you are going to need....Ammo, fuel, medicines and food.

Take care of your basic needs first and forget about buying gold.

 

[Neo-Luddite]

There have been some VERY thoughtful posts in this thread--I have little to add about investing in general. My best advice is that if you have some gold right now, save it unless you are converting it into tools (including guns) that will serve you well. It makes sense right now to convert that oz of gold into an AR if you need one--or into 4 or 5 sks rifles and spare parts.

One thing to do, if you are set for guns (in a relative sense), is take 100 bucks to an 'everything is a dollar' type store. I'm no advocate of buying Chi-com junk tools and such, but when they can be had for $1.00 and are readily purchased now--buy some things. As an example, we all have good quality cutlery--but how many packs of disposable razor knives do you have on hand? Zip ties, duct tape, ziploc bags, even cheap mult-tools and pliars etc. And meds and soap, rubbing alcohol, Strike-anywhere matches, toy paper caps, etc. If you really spend that 100 bucks, you'll have quite a diverse box of useful things.

Add in some .22 LR and 20/12 ga field loads.

 

[1911Tuner]

A recession is a blip on the screen. A depression is a big blip...either of which could eventually lead to a complete ecomomic collapse. During a recession, we tighten out belts and make do until the sun shines again soon. During a depression, we shut down our luxuries and concentrate on the necessities. Life could get rough, but things will probably get back to normal in due time.

If an economy collapses, the chaos that ensues is far-reaching and protracted. Paper money is worthless except for starting fires. Precious metals like gold and silver are bartered for necessary items...for a while...until the supplier comes to understand that it's useless. He can't eat it and he can't treat injuries with it and he can't pour it into a kerosene heater and burn it. All he can do is look at it.

A gun and ammunition not only serves what will likely be an essential purpose in providing meat for the table and defending against those who would kill you for your table meat...but the ammuntion itself becomes a barter item that could become worth twice its weight in useless gold.

 

[DENALI]

Well I've always looked at this dilemma from the perspective of a guy who lives in the deep woods in perfect harmony with God's gentle critters.
Once it all comes tumbling down around your ears how are you gonna put all that silver and gold to work putting meat in your larder? Someone said guns are a poor investment? Owning and understanding firearms is the most rational, sensible long term investment you could ever make! It's one I've invested in over and over again and I've never experienced a loss..

 

[jackstinson]

What do you think? Pay off the credit cards, buy gold/silver, buy ammo/guns?

I always keep the credit card paid off.
I've scouted out the deer in the local city parks and the ones living along the city freeways. The squirrels and rabbits in my neighborhood won't last long, but the dogs and cats around here might make tasty tacos.
Jack

 

[JohnBT]

"Someone said guns are a poor investment?"

They are no more an investment than a case of shovels or a box of hammers. They don't produce any income, they just sit there until they're put to work.

Let's say I buy 10 guns, or even 100. What is the return on my investment at the end of one year? Zero unless I sell or trade them and somehow make a profit. I'd still rather have the majority of my savings tied up in something that provides a stream of income.

I just can't see basing a personal investment strategy around the idea of tying up hundreds of thousands of dollars in guns and gold. Or even diamonds - perish the thought, speaking of ripoffs.

I'm not saying I don't have guns, ammo, some silver coins, first aid kits, etc., because I do. I'm saying if a recession does hit, or even the second coming of the depression, I want to have cash available to buy at fire sale prices.

John

 

[BattleChimp Potemkin]

Cant eat either! (Delicious gold! With a bullet cereal chaser! )

 

[gym]

Diamonds, you can carry a million dollars worth in a marlboro pack

 

[Lucky]

Ha you're all too trusting. No offense, but if you look back the US banned gold before and they could easily do it again.

Yes, that's right, before the war on drugs they had a war on gold. People smuggled gold and were jailed for it. It was illegal to own gold in the US.

US started going down hill as soon as bankers figured out they could own the federal government.

 

[Tom Servo]

Owning and understanding firearms is the most rational, sensible long term investment you could ever make! It's one I've invested in over and over again and I've never experienced a loss.

Couldn't agree more.

Investing in firearms for monetary gain in the future is a losing proposition. Sure, if I had a few Lugers in 1948, and I kept them perfectly maintained, I could pay off the house today. But look at the upkeep involved, and the amount of time the initial investment takes to appreciate. You'd be far better off dealing in stocks or mutual funds.

Firearms are invaluable survival tools, but they aren't a 401(k).

I've seen that attitude before...full auto owners in favor of NOT de-regulating them, or not in favor of cracking open the registry again.

I've seen it, too. A bunch of us were discussing the potential long-term effects of the Heller decision (presuming it goes our way). I doubt it'll spell the demise of the NFA, at least not in the near future, but the conversation got into what prices would be like.

Mr. Polo Sweater, who'd been listening in, said, "man, if that happens, I'm out six figures." Turns out, he had the money to buy tons of stuff before 1986, and he's planning on retiring on it.

It's not the first time I've heard that. Meanwhile, it takes us lowly plebs ~$700 and a ton of legwork just to get a suppressor.

I didn't do anything to make him cry. Honest.

 

[bogie]

The same experts always say the same thing - Buy Gold!

They're called "Gold Bugs."

And I think some are in the business...

Personally, I think the "recession" will miraculously end the weekend after Hilbama gets elected, and all the news media figures out that they don't need to snipe at Bush anymore.

 

[revjen45]

When society collapses and we're eating the bums at the bus station I think whiskey and toilet paper will be valuable commodities, and they're pretty cheap now.

 

[BattleChimp Potemkin]

I seriously stored a case of Malibu spiced rum under my bed in case of a SHTF situation. Carry one or two bottles with me, barter the rest . So if the S does HTF, cmon over! Its a hell of a tobaggan ride!

 

[jlbraun]

Guns, good luck finding someoone who will actually buy your gold coins at market price.

As FerFAL has said in going through the economic collapse in Argentina, 18K gold rings are the preferred currency, as no one knew how to assay actual 24K metal.

 

[Ed Ames]

If society collapses and the ATF goes with it we'll be able to make whiskey (or rum) again without all sorts of elaborite licenses.

Then all a feller'll need is a big stack of bottles to put the whiskey in and he'll have it made.

That's what I'm stocking up on... empty bottles... *hic* beatsh gold anydaysy....

 

[992]

I was under the impression that gold is not worth more,your dollar is just worth less.

992

 

[Ed Ames]

Not really.

The value of the dollar has gone down 25% recently.

The value of gold has gone up 100% in the same period.

Since the value of gold has gone up more than the value of the dollar has gone down, it's not *just* that the dollar is worth less.

But in part it is.

 

[Geno]

I suggest the metal market:

steel
aluminum
copper
lead

Diversify by purchasing:

polymers

Oh heck, just go buy a couple of Colts, Bushmasters, etc. Be certain to have ammo too. Given the rise in these items' prices, I doubt you will gain much in value, but they sure won't drop in value.

While you're focusing on all of that, be certain to have the bills paid, and a month of "supplies" like food around. Hmmm. Guess for me, it's just life as normal. See, the luxury of not being filthy rich, is the comfort of knowing that even if you lose everything you have, you don't lose much, so saving your's and your family's very lives is the key factor.

 

[Joe Demko]

Historically, guns as an investment aren't a wise choice. With few exceptions, they appreciate in value very slowly. The present value of legal full-auto stuff and the prices pre-ban stuff brought before the lapse were a factor of legal matters distorting the market. When plain old supply and demand are allowed to work, you don't see too much of that kind of crazy increase in price.
If there is another ban, don't count on being able to legally liquidate anything you bought in anticipation of such a jump in price.
In the event of Very Bad Economic Times, I'm not sure bartering off guns will provide much of a return either. First, what kind of guns are you planning on accumulating for the occasion? Single shots like the HandiRifle? AK's? AR's? Random lots of used guns? What?
So Bad Times come, and you have these guns to barter. How many bushels of potatoes do you want for one of your AK's? That's an important question if food is really tight and your potential trading partner wants to trade only a peck. Then too, I'm not too sure about the idea of trading that AK to somebody during Bad Times. He may decide its best use is on me so that he can have the rest of my stuff.
If I was going to hoard stuff for barter, I'd hoard liquor, tobacco products, drugs, and other stuff that people need for their Bad Habits. An accumulation of long shelf-life foods couldn't hurt either. Any guns would be for my personal use.

 

[buzz_knox]

Ironically enough, class III owners will probably fight you because their auto collection would be worth zilch. I've seen that attitude before...full auto owners in favor of NOT de-regulating them, or not in favor of cracking open the registry again.

I know several owners of NFA weapons. None of them have ever uttered anything than absolutely support for deregulation. The value of their weapons is far outweighed by the ability to excercise their rights and add to their collection