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Eric Sprott On A "Gold Tsunami"

Tyler Durden's picture


Gold Tsunami

By:  Eric Sprott & David Franklin of Sprott Asset Management

Ignoring real estate, most people invest their hard earned money in paper things. Stocks, bonds, annuities, insurance - it’s all paper, and it sits nicely in our bank accounts and shows up on our computer screens. Halfway across the world, investors in China and India have never trusted paper investments as a store of value - and they’re converting their hard earned paper money into gold and silver bullion. Not that this is anything new. It isn’t. But the scale and speed with which they are accumulating precious metals IS new, and it’s driving the fundamentals that we believe will lead to higher prices in 2011.

Demand for the metals is literally exploding in Asia, and it’s creating shortages of physical bullion around the world. The statistics are extraordinary. China, the world’s largest gold producer, now requires so much of the precious metal (in addition to what it already mines) that it imported over 209 metric tons (6.7 million oz) of gold during the first ten months of 2010. This represents a fivefold increase from the estimated 45 metric tons it imported in all of 2009.1

According to the World Gold Council, Chinese retail demand for gold increased by 70% from October 2009 to September 2010, representing a total of 153.2 tonnes of gold imports. Yet, over the same period, the demand for gold jewelry rose by only 8%.2 There is a clear trend developing for Chinese investment in gold as a monetary asset, and China is buying so much gold for investment purposes that it now threatens to supercede India as the world’s largest gold consumer. Chinese demand in 2010 is expected to reach approximately 600 tonnes, just behind India’s 800 tonnes.3 To put that in perspective, 2010 world mine production is forecasted to be 2,652 tonnes, which means China and India could collectively lock-up over half of global annual production.

Even more surprising is the increase in Chinese demand for silver. Recent statistics show that silver imports have increased fourfold from 2009 to 2010. In 2005, the Chinese exported just over 100 million oz. of silver.4 In 2010, they imported just over 120 million oz. This represents a swing of 200 million+ oz. in a market that supplied a total of 889 million oz. in 2009 - a truly tectonic shift in demand!5

We are seeing widespread evidence of major shortages of physical gold and silver bullion across the globe. The Perth Mint recently stated that: "Demand for our coins and medallions is strong, but the biggest demand is coming from banks and traders looking for kilo bars."6 Three weeks ahead of Chinese New Year, Asian dealers were reporting premiums in mainland Chinese gold exchanges of $23 per ounce.7 Even Jim Cramer has acknowledged the current shortage in minted US gold coins, stating on his CNBC television show in December that: "As someone who tried to buy U.S. coins in December, there was a real scarcity. My dealer reportedly just couldn’t get any coins - tried to sell me Australian bullion. Said there was a shortage. Very telling."8

While Chinese New Year celebrations typically drive gold demand in the month of January, there are stronger forces at work here. The Chinese are fighting the resurgence of inflation. To protect their wealth, the populace is turning to gold and silver as a store of value. Precious metals ownership is a relatively new phenomenon in China, where Chinese citizens have only been able to purchase gold freely within the last ten years. Ownership restrictions were lifted in 2001 when the Chinese central bank abolished its long-term government monopoly over gold. The Shanghai Gold Exchange was then created in October 2002 to replace the People’s Bank of China’s gold purchase and allocation system, thus ushering in a new era of gold investment in China.9 Investor interest in precious metals has increased dramatically since then, and new investment products are making gold more convenient to purchase and easier to own.

One such program recently caught our eye and speaks to the new era of gold investment within China. On April 1, 2010, the World Gold Council and Industrial and Commercial Bank of China (ICBC) issued a press release announcing a strategic partnership.10 Though seemingly innocuous, this press release introduced a completely new investment product for Chinese investors: The ICBC Gold Accumulation Plan ("ICBC GAP"). ICBC GAP allows investors in mainland China to accumulate gold through a daily dollar averaging program. The minimum investment required is either 200 RMB per month or 1 gram of gold per day (equivalent to approximately US$42).11 Customers may renew the contracts at maturity, convert them into cash or exchange them for physical gold. The accounts are perfect for investors who want to accumulate gold over the long-term. While gold accumulation plans exist in Japan, Switzerland and other countries, this is a first for mainland China. Kudos to the World Gold Council for their efforts in setting up and promoting the program.

The most significant fact related to the ICBC GAP program is how fast it has captured the investing public in China. One million accounts have already been opened since the program launched on April 1st, resulting in the purchase of over 10 tonnes of gold thus far. According to press releases, the ICBC GAP plan was taken up by a mere 20% of total depositors at ICBC, and was only launched in select Chinese cities during the test phase. The ICBC bank just happens to be the largest consumer bank on earth with approximately 212 million separate accounts. If we apply some realistic assumptions and arithmetic, it’s easy to imagine how large this program could potentially become.

Suppose, for example, the ICBC GAP plan were expanded to cover all ICBC depositors, and also expanded to the next four largest Chinese banks. Let’s further assume that the gold purchases within the plan enjoyed the same rate of growth as the test phase mentioned above. If we add all these numbers together, it results in gold purchases of an extra 300 tonnes of gold per year, or over 10% of the estimated 2010 global gold production.

The implications of this burgeoning Chinese demand for the gold market are immense. If these predictions prove accurate, the ICBC GAP plan could become the single largest buyer of physical gold on the planet. Considering that the program has only been launched in one Chinese bank thus far, imagine if it were extended to other institutions or other large gold consuming countries such as India, Russia or Turkey?

Speaking from Japan, the head of the World Gold Council recently commented on the early success of the ICBC GAP plan in China: "Here in Japan, it has taken over 10 years for the gold-savings account industry as a whole to reach 700,000 accounts. It is impressive that only one Chinese bank can exceed that level so easily, within one year, without PR or active marketing in-branch." The World Gold Council does their own arithmetic on how much gold the Chinese can consume: "In 2009, per capita gold consumption in China was 0.33 grams, up from 0.17 grams in 2002." Based on this data total Chinese gold consumption could range from 1,000 tonnes per year or more.12 This implies that the Chinese could consume almost half of the gold produced globally on an annual basis.

The ICBC Gold Accumulation Plan and other alternate methods of investing in gold have the potential to overwhelm current supply in the gold market. If a similar program were launched for silver accumulation, in the same dollar terms at current prices, it would consume over half of the silver produced each year! In Asia, only physical gold and silver will do… and unlike the supply of treasury bills, bonds or paper currencies, the supply of physical gold and silver is undoubtedly finite.

We believe Asian demand for physical gold and silver is akin to a tsunami. While precious metals prices have corrected on the paper exchanges, the inflation resurgence in Asia is quietly driving new, unforeseen levels of physical demand for the metals. While the world continues to float on a sea of paper, this massive wave of physical demand silently threatens to crash into the physical gold and silver market, potentially wiping out tangible supply.



1 Hook, Leslie. (December 2, 2010) China’s gold imports surge fivefold. Financial Times. Retrieved on January 31, 2011 from:
2 D’Altorio (December 30, 2010) China’s Gold Rush. Investment U. Retrieved on January 31, 2011 from:
3 Pearson, Madelene. (January 12, 2011) Gold Imports by India Likely Reached Record, WGC Says. Bloomberg Businessweek. Retrieved on January 31, 2011 from:
4 (December 2, 2010) Gold Imports by China Soar Almost Fivefold as Inflation Spurs Investment. Bloomberg. Retrieved on January 31, 2011 from:
5 The Silver Institute. Demand and Supply in 2009. Retrieved on January 31, 2011 from:
6 Campbell, James (January 12, 2011) Unrelenting demand for gold below $1400 - Perth Mint. Retrieved on January 30, 2011 from:
7 Ash, Adrian (January 12, 2011) Shanghai Gold Premium Hits $23/Oz, China Opens 1 Million Gold-Savings Accounts. London Gold Market Report. Retrieved on January 31, 2011 from:
8 CNBC: Buy this pause in gold’s bull run, "Mad Money" host Jim Cramer advises. Retrieved on January 31, 2011 from:
9 China Gold Report: Gold in the Year of the Tiger. The World Gold Council (March 29, 2010). Retrieved on January 31, 2011 from:
10 World Gold Council (April 1, 2010) World Gold Council and ICBC Enter into Strategic Partnership to Promote China’s Gold Market. Retrieved on January 31, 2011 from:
11 World Gold Council. (December 16, 2010) World Gold Council and ICBC launch first gold accumulation plan in China. Retrieved on January 31, 2011 from:
12 Ash, Adrian (January 31, 2011) Gold Shorts Beware China’s Million-Strong Gold Savers. Forbes. Retrieved on January 2011 from:



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Mon, 02/07/2011 - 15:15 | 941094 Jason T
Jason T's picture

this idea of "not being able to eat it" is a joke right?  


Farmers in Germany had their graneries full but would not accept the confetti from Berlin.  But would surely accept gold or silver.  Who do you think ate?

Mon, 02/07/2011 - 15:31 | 941127 LawsofPhysics
LawsofPhysics's picture

I am a farmer.  Mostly soybean.

So, yes, I will happily take gold and silver.

Mon, 02/07/2011 - 15:44 | 941162 asdasmos
asdasmos's picture

Wake me when they make edible dollars....


What makes you think people will not accept gold and silver?

Mon, 02/07/2011 - 18:18 | 941601 downrodeo
downrodeo's picture

+1 (troy oz. of gold yo!)


I don't even feel like smacking a person when they say that to me. It is such a tired argument, and I can't believe that anyone would use it in earnest. Instead, I smack myself as I must be dreaming. For some reason, my last discussion about gold reminded me of my first fight...with Tyler.


Fri, 08/19/2011 - 08:33 | 1576557 mediahuset
mediahuset's picture

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Mon, 02/07/2011 - 15:45 | 941167 CPL
CPL's picture

Are you using any of the North American brokers anymore?  The Chinese brokers I deal with in Vancouver pay in silver for the corn I ship them.  Even send the containers to Ontario.


Personally I like the fact I have been getting paid in silver instead of Canuck bucks or USD.  Last years harvest is now worth 30% in terms of capital.  Might be expanding my land holdings a couple more hundred acres and hiring someone to deal with the brokers to shake a better deal out of them.

Mon, 02/07/2011 - 16:57 | 941377 goldsaver
goldsaver's picture

CPL, I will assume you are not a lying troll making up a story. This is fascinating to me. Chinese dealers are paying you in silver for your grain? Do you have a silver price for the grain or is it based on CND rates? Did the Chinese offer to pay you in silver or did they accept your demand that they do so? Do you know of any other grain exporters getting paid in Au/AG ? How do you deal with tax issues? Report the value of the silver in CND or oare they paying in maples (face value)? This could be a very interesting unreported development.

Mon, 02/07/2011 - 17:18 | 941442 Hephasteus
Hephasteus's picture

The fed fucked up when they got in the money business. You do not have to pay taxes. It's all corporate law and yes when the fed says you are voluntary tax payer they mean it. And when supreme court justices say everyone who is in jail is there voluntarily they mean it. They just don't tell you how to go about NOT volunteering.

Mon, 02/07/2011 - 18:44 | 941675 Gordon Freeman
Gordon Freeman's picture

Don't believe everything you hear...

Mon, 02/07/2011 - 21:57 | 942056 CPL
CPL's picture

Last two years and I just do corn seed, not food, just seed.  They pay 30% over spot price for the seed versus North American brokers in CAD.  The Chinese brokers were poking around Ontario around three years ago, they made their presentation explaining how it was important to give options in trade.  I took them up on the offer along with other guys around here, I don't think we've sold a single piece of corn in the area unless it was grown in our own personal veggie patches.

We now have Indian brokers doing the same thing.

If anyone thinks the commodity board is representative of reality on the cost of food is going to incredibly surprised when there are companies underwriting derivatives on food that will never be delivered.

The JPM's of the world might think they are in the zone of control, but when their plate is empty at breakfast lunch and dinner because the Indian and Chinese government's understand that they have to feed their population.


Contractually the offering is conditional on yields and a sliding scale.  Since everyone in this area has been seeing a slow crop loss that amounts to around 20-30% over the last ten years because of environmental conditions (warm too soon, not enough rain, cold snaps in July, etc).  It increases the cost of the goods.

It's not the huge btw.  Silver and Gold is money, real money.  And when it was offered two years ago, I pretty much knew the writing was on the wall for North America in general.

To give you an idea of the numbers I'm talking about.  Regular spot market price for corn per bushel is 6.70, I get 7.90 from the Chinese and it was paid in silver last October after curing the corn.  Year before I got 5.34 a bushel, again paid in silver.  I can get 80 bushels of corn out of an acre now, I used to average a yield of 115  bushels of corn in 2001.  With 200 acres running this year in a regular land rotation process, I'm estimating the spot price around 8.10 CAD per bushel paid in silver or gold at the end of the summer.  In real terms of capital value, the 120k I was paid in silver has kept it's value in terms of my buying power.

You have to understand something about food.  It's ready when it's ready.  And there is less of it, it costs more for people to eat.  At this point in time, when I'm selling seeds to make more food, I'm not taking paper anymore because the Chinese and the Indians are offering an option. Nor are any of the other guys that make food for your living and theirs.  We take shiny metals like gold and silver because the option is available.

Mon, 02/07/2011 - 18:37 | 941654 goldsaver
goldsaver's picture

CPL, I will assume you are not a lying troll making up a story. This is fascinating to me. Chinese dealers are paying you in silver for your grain? Do you have a silver price for the grain or is it based on CND rates? Did the Chinese offer to pay you in silver or did they accept your demand that they do so? Do you know of any other grain exporters getting paid in Au/AG ? How do you deal with tax issues? Report the value of the silver in CND or oare they paying in maples (face value)? This could be a very interesting unreported development.

Mon, 02/07/2011 - 22:08 | 942061 CPL
CPL's picture

Taxes?  I'm trading one commodity for another at market value, no "profit" is generated because silver and gold is not a "currency" as far as the law is concerned.  It is the opposite of currency, it has value.  The end tally is "0" when looking at the books.  I wasn't "paid", I traded fair and square as far as the law is concerned.

When I exchange the silver for money however the capital gain is then recognized.  I eventually have to exchange the silver for cash for things like wood for the furnace, gas for the car, hay for horses, clothes, etc.

Trick is like anything else to do with capital management, don't cash it all and spend like a pauper.

Tue, 02/08/2011 - 03:22 | 942351 A Nanny Moose
A Nanny Moose's picture

I eventually have to exchange the silver for cash for things like wood for the furnace, gas for the car, hay for horses, clothes, etc.


I wonder if you might be trading with the wrong people. Surely there are those who will trade for silver?

Tue, 02/08/2011 - 09:07 | 942519 Jonathan North
Jonathan North's picture

I found the same problem.  In the long term I want to hold physical silver.  But in the short term the dollar has not yet collapsed and it is still the generally accepted medium of exchange.  My silver hoard has been quietly appreciating for the last 15 months as the dollar weakens.  But to get by I am forced to trade small amounts of silver for CURRENCY. Because currency is what is current, that's why they call it currency.  I have absolutely not faith in the fiat money the government is currently printing. 

Tue, 04/26/2011 - 01:16 | 1206713 nkktwotwozero
nkktwotwozero's picture

Pretty sure that falls under 'barter' which IRS asks (politely) to report as 1099-B.


Brought to you by Carl's Jr.

Mon, 02/07/2011 - 15:58 | 941200 chumbawamba
chumbawamba's picture

Thus concludes this episode of Contradictory Contrarian Cuntflap.

I am Chumbawamba.

Tue, 02/08/2011 - 03:52 | 942360 Bay of Pigs
Mon, 02/07/2011 - 15:33 | 941133 KickIce
KickIce's picture

imo, we're looking at a little bit different situation.  Not only inflation but actual shortages as well.

Mon, 02/07/2011 - 15:42 | 941155 LawsofPhysics
LawsofPhysics's picture

Ah yes, peak "everything"

Mon, 02/07/2011 - 15:58 | 941198 ColonelCooper
ColonelCooper's picture

Dude.  I am as big of a Beans, Bullets and BandAids guy as anybody here, but how about you go write a letter to SurvivalBlog, or post at ARF. 

You are commenting about a post submitted by a dude who runs PM's for a living.  Did you honestly expect him to say you should sell your metal and go long #10 cans and lead?

Topics at ZH cover just about everything, but try to at least have a decent segue if you want to hijack a thread.

No junk from me BTW, but you are approaching Doucheville.

Mon, 02/07/2011 - 16:04 | 941218 william the bastard
william the bastard's picture

Are you saying Sprott has a bias?


Mon, 02/07/2011 - 16:23 | 941268 ColonelCooper
ColonelCooper's picture

No, Dipshit.  I'm saying that when you read something written by a guy who runs metal funds, you are rather dimwitted to expect him to write about how to remodel a kitchen.

And yes Troll, of course he wants you to buy his funds.  Don't put words in my mouth because you are trying to make a point that is already pretty fucking obvious.   


Mon, 02/07/2011 - 16:26 | 941282 william the bastard
william the bastard's picture

The only point you have is your head.

Mon, 02/07/2011 - 16:29 | 941285 ColonelCooper
ColonelCooper's picture

You really aren't getting any better at this.  Don't you have something to cut n paste somewhere?

Mon, 02/07/2011 - 16:33 | 941294 william the bastard
william the bastard's picture

Hey, I cut and pasted this from the article:

"Even Jim Cramer has acknowledged the current shortage in minted US gold coins"

Mon, 02/07/2011 - 18:44 | 941673 ColonelCooper
ColonelCooper's picture

Okay, that's funny.  If you could have worked in something about not being able to eat it, and maybe a little something about a bubble, it would have been first class trolling.

Mon, 02/07/2011 - 19:30 | 941768 Bay of Pigs
Bay of Pigs's picture

Billy the Gold Douche never gets tired of being thoroughly bitch slapped by the Good Col...

LMAO. Yeah, Eric Sprott is a real dummy isn't he? Only a billionaire you fucktard.

Mon, 02/07/2011 - 17:21 | 941448 tmosley
tmosley's picture

The drive by troll strikes again!

Mon, 02/07/2011 - 18:42 | 941668 ColonelCooper
ColonelCooper's picture

Operator: Troll help line, what is the nature of your call?

William: I really need some help, this pasting isn't working out the way they said it would.

Operator: Name and I.D. Sir?

William:  William, # 2376

Operator: Please hold while I transfer you

Elevator music..........

Troll Tutor: William, buddy.  What's going on?

William: These guys keep coming up with like facts and charts and stuff.  Everything you put on the paste list is just making me look like,,,like,, an asshole.  They're calling me things like Troll and Dipshit, and everything I do is going south.  Nothing works; I think these guys might actually be, buhbuh be,,,,right?

Troll Tutor:  Calm down William.  What site are you working?

William: Zero Hedge, Sir.

Troll Tutor:  Dammit William!  You're working off the advanced list!  Fool! You've only been at this for a few weeks.  I TOLD you to stay on the Yahoo Finance and Yahoo Answers for SIX GODDAMN months! THEN, if things were working out, you go to WSJ.  How did you even get the advanced list yet?

William:  It was stuck to the back of my handout booklet.  I'm sorry, I didn't know.  I really didn't know.

Troll Tutor:  Log out William.  I need to send somebody over there to repair the damage you've done.  YOU, I want to report to the training center next week.  You're going to redo your orientation before I pay you to paste on ONE MORE THREAD!  Dammit.

William: Yessir, sorry Sir.  Please give me another chance.  My mom said that if I couldn't keep this job I was going to have to momve out of the basement.  Please Sir?

Dial Tone..............................

Mon, 02/07/2011 - 19:56 | 941858 Hephasteus
Hephasteus's picture

But sir. You said sword sharpens sword. Why won't I sharpen. Hmm. Why won't I sharpen?


Mon, 02/07/2011 - 20:57 | 941982 ColonelCooper
ColonelCooper's picture

Nice.  +++

Mon, 02/07/2011 - 23:50 | 942206 DoChenRollingBearing
DoChenRollingBearing's picture


Colonel, you sir, are a Troll Terminator par excellence!

Mon, 02/07/2011 - 16:51 | 941356 KickIce
KickIce's picture

My bad, I was actually referring to food so I'm in agreement that having food on hand is a good idea.

Mon, 02/07/2011 - 16:52 | 941361 KickIce
KickIce's picture


Mon, 02/07/2011 - 17:48 | 941534 CynicLaureate
CynicLaureate's picture

Can't eat gold or silver?

I'll sell you a mature breeding cow for one troy ounce of gold, or a nice heifer for 15 troy ounces of silver (FOB Austin, TX).  Already sold the steers this year.

Related chart:$gold:$djalc

(note that the $DJALC index tracks the price per hundred pounds of live cow, so a ratio value of 18 means that one ounce of gold buys an 1,800 pound cow)

Mon, 02/07/2011 - 19:32 | 941781 Dr. Sandi
Dr. Sandi's picture

Holy sheep shit, Cowboy. That's an intriguing chart you're just exposed us to. Thanks.

My brain's gotta chew on it a little, but it's something subtle yet quite important to know. I also clicked on the historic chart. Looks like rhe REAL price of beef's going up faster than gold over the past couple of years if I read that bad boy right.


Mon, 02/07/2011 - 21:05 | 941998 ColonelCooper
ColonelCooper's picture

Feed, Feed, and Feed.  Now I'm no farmer, just live in farm country, (and negotiate a lot of crop damage from utility easements) but what I'm seeing is every available INCH of tillable going into corn.  When it's selling for six bucks a bushel, it gets expensive to shove it down Bessie's cud. 

Fri, 02/25/2011 - 05:51 | 942050 Dr. Sandi
Dr. Sandi's picture


Mon, 02/07/2011 - 19:47 | 941812 buzlightening
buzlightening's picture

Yep! A medium of exchange comes to the rescue when paper fiats blowing in the gutter!!  Honest money gold/silver!! The track record speaks for itself and  even jpig morgue wants collateral in gold!! It's truth as money goes marching on!! A timeless medium of exchange!!

Tue, 02/08/2011 - 05:18 | 942384 monkeys.pick.bottoms
monkeys.pick.bottoms's picture

You may want to take into account an exchange rate of gold and grain in an environment plagued by food shortage.

Mon, 02/07/2011 - 15:23 | 941101 nuinut
nuinut's picture

Fekete said:


The overwhelming majority of working economists don’t see that gold still plays an indispensable role in the credit system. The U.S. Treasury bond market has a sine qua non adjunct in the gold futures market. Without it bonds would be irredeemable: they would be promises maturing into more promises. But once permanent gold backwardation strikes, the prop of gold futures is removed, and the U.S. Treasury bond market will succumb to the sudden death syndrome. For the time being it is supported by speculative demand, but the demise of the gold futures market will make the bond speculators scurry for cover.
As long as confidence in the monetary system is unimpaired, gold will be widely available and the credit system will work properly. Increasing unavailability of gold indicates the threat of a breakdown of the credit system. Gold is going into hiding. Watch for the day when it will not be for sale at any price. When this happens, the credit system and along with it trade will collapse. It is not a matter of equilibrium or the lack of it. It is a matter of life or sudden death.

The debt based system cannot exist without available gold.

How long are most people gonna eat without that?

Mon, 02/07/2011 - 15:31 | 941126 Jason T
Jason T's picture

am long growing a garden and raising chickens.

seriously, when food prices go up enough, there will be a boom in home gardening and chicken raising.  


Mon, 02/07/2011 - 16:51 | 941360 bankrupt JPM bu...
bankrupt JPM buy silver's picture

you go chickens, I'll go silver, we'll both win

Mon, 02/07/2011 - 17:57 | 941557 DosZap
DosZap's picture

Ha, if you think the .guv fkrs are going to allow you to be self sustaining, and grow food, and raise chickens, livestock, dream on.

They will stomp you.

YOU WILL be a ADM slave, if you want to eat.

Mon, 02/07/2011 - 21:56 | 942054 dark pools of soros
dark pools of soros's picture

not even a hundred years ago....



Tue, 02/08/2011 - 00:01 | 942060 Nostradumbass
Nostradumbass's picture

"Ha, if you think the .guv fkrs are going to allow you to be self sustaining, and grow food, and raise chickens, livestock, dream on.

They will stomp you.

YOU WILL be a ADM slave, if you want to eat."


I have given this a little thought and it would, to me, be at this point when the mass of lazy, ignorant Americans awaken and FINALLY get into the streets...I wouldn't worry too much about the gov. trying to control your personal veggie and chicken farm...

Mon, 02/07/2011 - 19:54 | 941829 Dr. Sandi
Dr. Sandi's picture

I'm slowly rising off my lazy ass and joining the "Feed yourself and live" movement.

Despite the fact that our 1/4 acre subdivision paradise has land about as fertile as the plains of Mars, I know that our little city, like many, will let us keep 3 hens, no roosters.

This soil is crap, so I was very excited to find out about growing potatoes in a bag. I can DO this:

They say if you do it right, you can get about 10 pounds of new potatoes for every pound of seed potatoes you plant. And as nice as tomatoes and endive are, the average 'merican eats 125 pounds of taters a year. I think we're going to need more spuds than tomatoes to get through a "long emergency."

And as much as I love the care and selection I see in the catalog of Territorial Seed of Cottage Grove, OR:

they're damnably expensive for people with no traceable income.

I found a much less flashy outfit back in my motherland at Zeeland, MI, with much cheaper seed prices:

I've always trusted people who wear wooden shoes. (Just don't start talking religion or politics.)

I haven't done business with either outfit. Territorial has an excellent rep. But since I be a crazy, take a risk type, I'm about to order seed stock from the Zeelanders and get me a few bags of taters growing out on the south side of the homesead. And maybe some carrots where the tomatoes were last year.

And yeah, tomatoes again too. We always grow tomatoes, even when we have a lousy growing year like 2010 was.

We haven't bitten the bullet and gotten the hens yet though. Dealing with hens is a lifestyle change, and we're not out of work... YET!

We're not close to self-sustaining here, but if we don't start to learn now, we might have to learn under the gun, which is a lot less fun.


Mon, 02/07/2011 - 20:46 | 941959 Lndmvr
Lndmvr's picture

In the depression, wifes grandpa feed the hobos coming up grom the tracks potatoes and onions for a little work around the farm. Butter, eggs, onions and potatoes make damn fine eating. .Gov has a law about tracking chickens when they die now. Been buying large bottles of olive oil for frying as it keeps better than butter.

Tue, 02/08/2011 - 08:57 | 942503 Absinthe Minded
Absinthe Minded's picture

Lndmvr, you read my mind. All those veggies don't do well when they're stuck to a pan. Olive oil is a great ace in the hole. How much olive oil is going to be shipped over seas when TSHTF? If you can buy it in 5 gal. drums, do it! Great for flavoring too. I stocked up on veggie oil too, good for pancakes.Drizzle it on french bread and bake, delicious. I'm getting hungry.

Mon, 02/07/2011 - 20:57 | 941981 Bringin It
Bringin It's picture

Nice Dr. Sandi.  Remember to order heirloom seeds so that you won't need to reorder next year.

Fish ponds are good too.

Mon, 02/07/2011 - 21:17 | 942009 Dr. Sandi
Dr. Sandi's picture

Fish. Hmmm, good idea, Bringer.

Here in Cascadia, we have plenty of water on the ground, in the ground, in the air and in a holding pattern over the coast, just waiting to come on down. Except for about 6 weeks in July-August. But I didn't even think of fishies.

Of course, there's also a hell of a lot of them running wild around here too. But not right out back like having your own pond would do.

Great idea. I'm gonna look into it. Good way to get some mileage from the back corner of this stupidly shaped lot.

Mon, 02/07/2011 - 22:18 | 942083 ColonelCooper
ColonelCooper's picture

Couple of things Sandi, if I may.  If money is available, a 6' cedar privacy fence hides a lot of rabbits. And the hook you butcher them on ;)  (kudos to Daddy-o below)

I have three garden plots which I rotate, and keep the inactive ones planted in clover.  I really only plant a little more than 1/4 acre at a time, but it provides WAY more than our family of four needs.  We probably gave two extra families most of their winter veggies. Certainly spuds, green beans and most of their tomatoes.  Plus, I know I've given away 50 quarts of pickles, sauces, etc...  Sorry to ramble, but with a little work, you could do a Helluva lot with 1/8th acre.     

Steel garbage cans filled with sand make great mini root cellars if you have any kind of cold room in your basement.

Hanging tomato planters save ground space and minimize risk of disease like blight.

Small patches of veggies can be worked into ornamental beds.  My wife has greens growing everywhere. Rhubarb too. 

We sprout a lot in the winter time.  It's cheap, easy, takes up no space, and a fun way to get some fresh green in the middle of a hard winter.



Mon, 02/07/2011 - 23:34 | 942184 Dr. Sandi
Dr. Sandi's picture

Thanks Colonel. You're right. We're almost completly fenced in already. This was the first house in the subdivision, so the rest had to build privacy fences as they filled in. Of course, the neighbors can still see in from their second floor, but so far, it's been pretty 'live and let live' around here.

I could do rabbits, but what I see as a food crop is unfortunately seen by two others here as the cutest little friend you could ever hope to have if you can't have cats (allergies) or dogs (a dirty dog hater lives here). So Fluffy and friends probably won't be getting the ranch treatment here at the homestead. Unfortunately.

And as it turns out, one of us apparently really hates fish. Weird, since she's a sushi lover. But until I can figure out how to raise Tuna in a backyard pond, we're probably screwed. Too bad, I was thinking that a barrel or pond of catfish might make for some tasty dinner treats.

My family hasn't really internalized the idea that when things turn to crap, the supermarket might just be out of flash frozen shrimp and pork steaks for eternities at a time. They're slowly figuring it out, but they live in eternal hope that I'm a crazy doom nut and that the law of gravity has been repealed. I share their hope, but I've already internalized the dark side.

Sprouts also sound like a GREAT idea. We get about 10% of possible sunshine here in Smallville, so things that grow indoors are always very useful, especially this time of year.

Nobody in these parts has a basement. But there's a nice spot in the back of the garage with floor and two walls adjoining Mother Earth. With a little insulation on the other 3 sides, we might just have a presentable root cellar. Which leads to 'somebody' cleaning out 8 years of accumulated crud out there so we can use our garage again.

Preparing for the future isn't just an idea, it's a whole new way of dealing with life. I talk a great game, now I've gotta see if I have what it takes to get in there and scrimmage with Mom Nature and her minions.

We've got silver, got gold, got dry and canned foods. But never enough of any. This fresh food concept takes some work. And I'm thinking that those who believe they're ready for anything with a pantry full of MREs better stash a lot of canned prunes, just in case!

And yeah, we have perfect climate for a few fruit trees. This will be Year 3 for many of them. Last year was a disappointment, thanks to the cool, wet weather which led to small fruit and lots of fungal creep. Got one decent peach, plenty of cherries for every goddamn bird in the state, and disappointing apples that never reached maturity because of the lousy season. And even the ever reliable tomato crop was a fraction of normal.

Spearmint did great though. But I'm not sure we could winter on a bumper crop of the stuff.

I can understand why so many people have gotten the hell out of farming. At least in an office, your whole year's work doesn't usually turn to crap overnight. Unless you have a fatal hard drive crash or something, I suppose.

Tue, 02/08/2011 - 02:35 | 942336 Real Estate Geek
Real Estate Geek's picture

Please allow me to suggest:

All New Square Foot Gardening: Grow More in Less Space!

by Mel Bartholomew

ISBN-13: 978-1591862024

EDITED TO ADD:  Whoops, Daddy-O beat me to it; and only one post further down.

Tue, 02/08/2011 - 08:27 | 942475 ColonelCooper
ColonelCooper's picture

Don't know if you'll catch this or not; the thread is pretty old now.  You don't have to eat the rabbits now.  If you had 1 (2 is better in case of sickness) buck, and 2 (3 is better in case one is not a nester) does, you can turn them into 1,245,307 rabbits in around two and a half days :)

You could have a litter or two with each doe to make sure they do it well, and still sell/give them to pet stores. 

Mon, 02/07/2011 - 21:26 | 942021 DaddyO
DaddyO's picture


Dr Sandi,

This method of food production works very well when the base ground wouldn't grow mold. Mel's book is worth the money and his method works on those little 60x100 lots in Smallville.

Raising chicks for food is much more intensive than raising them for eggs, I've done both. Rabbits in the city limits will be much easier with no noise and very little odor. this link will address the issue and show you in real terms why chickens are not a good choice in town.

Hope this helps...


PS: I've been a prepper for a very long time and have chickens, pigs, horses and a garden and live in a rural area, 15 miles from the nearest grocery store. I have enough land to have free range chickens for food production but until the balloon goes up, just use them for eggs.

Mon, 02/07/2011 - 22:11 | 942071 Nostradumbass
Nostradumbass's picture

Great idea on rabbit raising instead of chickens!

Where do you find the eggs though?

Nyuk, nyuk, nyuk!

Mon, 02/07/2011 - 22:15 | 942076 Nostradumbass
Nostradumbass's picture



... and don't tell me they will be in my easter basket!

Mon, 02/07/2011 - 22:09 | 942065 Nostradumbass
Nostradumbass's picture

My observations as a pretty run-of-the-mill backyard veggie grower...

Beets and squash are real easy to grow and provide excellent nutrition - but squash takes a lot of space. Hard squashes will keep for months in a box/basket/bag on the kitchen floor or on the patio. Green beans - either bush or pole are also easy to raise and provide good nutrition for you and the garden soil. Put some blackberry vines around the perimeter of your yard - they take care of themselves pretty well and berries are a very important dietary ingredient. Herbs are also easy and can be used for flavoring, teas, and medicine.

Mon, 02/07/2011 - 23:04 | 942143 Dr. Sandi
Dr. Sandi's picture

Thanks for the thoughts, Nostrum.

If I try to plant squash or zucchini for this family, I will not live to see the harvest. But greeen beans seem to be a big hit here in the compound, along with snap peas. And I've heard they can grow in pretty crappy soil, and we have that angle covered.

But this is the Pacific Northwest. People have been strung up for planting more $%@!ing blackberries. They're our version of kudzu. Okay, slightly more edible than kudzu, but does kudzu reach out and try to eat your kids?

Tue, 02/08/2011 - 00:30 | 942230 Nostradumbass
Nostradumbass's picture



Oh yeah, the berry thing in the PNW... I remember now.

Well, what life sustaining crop grows well in a climate that is just short of living algae?

Then again, if/when Mt. Hood, Mt. Bachelor, Mt. Rainier etc. go BOOM!, there will be better soil for lots of plants if you live long enough to sow and reap.

I'd say tubers, squash (be firm in your concern for the health of the squash-scorning ones in your charge) and greens are your best bet up in the PNW (along with plenty of canned dry goods etc.) - do not forsake completing your own due diligence in this regard though... I am currently in So. California afterall. And lets not forget making beer and wine and liquor at home while we are at it... this will help make the gloom of our predicament pass a little more smoothly!

But then again, this is all great to talk about BEFORE we have to actually dig in and coax a life out of our soil, savings and wit...

Best wishes to all in your endeavors and I trust that the survivors are of better character than the present rulers of this strange world of humans...



Tue, 02/08/2011 - 02:40 | 942338 cackling capers
cackling capers's picture

As to your crappy soil, getting and keeping a thick 20/30 cm mulch layer may do miracle. Check out permaculture on the web for ideas on that. Soil here is pretty good and we did the mulching mostly to keep weeds at bay, but it does make beautiful soil. The whole permaculture thing got started on marginal, bad, land in Australia, so it should be suited to your needs.

Mon, 02/07/2011 - 18:20 | 941607 DoChenRollingBearing
DoChenRollingBearing's picture

@ nuinut,

Fekete and FOFOA are the two, well, Giants of the gold world.

Mon, 02/07/2011 - 15:22 | 941107 bigkahuna
bigkahuna's picture

Gold is not meant for eating.

Mon, 02/07/2011 - 18:43 | 941670 naughtius maximus
naughtius maximus's picture

Goldschlager bitchez!

Mon, 02/07/2011 - 15:22 | 941108 SilverDOG
SilverDOG's picture

Fiat currency caloric value is identical, zero. 

One will maintain a purchasing power; of edibles.

Convince masses to store food, not plausible or palatable for said.

Encourage viable transformation of assets into portable fluid currency. Possible.

Mon, 02/07/2011 - 15:23 | 941110 Millivanilli
Millivanilli's picture

Fucking retard.

Mon, 02/07/2011 - 15:23 | 941111 Richard Head
Richard Head's picture

I love how people use "math" and "physics" in their user names on ZH, as if that somehow confers credibility when discussing financial markets and economics.  

Mon, 02/07/2011 - 16:07 | 941228 Triggernometry
Triggernometry's picture

That's correct, there's a bunch of posers on here. But don't take it from me, I only hold degrees in astrophysics and mechanical engineering; and I will honestly say I lack any expertise in markets or economics.

Mon, 02/07/2011 - 16:28 | 941283 william the bastard
william the bastard's picture

Then it goes without saying you're unemployed.

Mon, 02/07/2011 - 17:10 | 941422 Triggernometry
Triggernometry's picture

Gainfully employed in big pharma at the moment, scheming to work for myself soon...

Mon, 02/07/2011 - 17:13 | 941427 william the bastard
william the bastard's picture

There is a definite skillset to driving the chemical tanker trailers.

Mon, 02/07/2011 - 17:15 | 941432 Hephasteus
Hephasteus's picture

So you make those childproof caps that old people can't open but children can.

Mon, 02/07/2011 - 21:04 | 941987 Bringin It
Bringin It's picture

No, he makes the wonder drugs inside that keeps the sheeples content.

Mon, 02/07/2011 - 15:30 | 941122 Rudeger
Rudeger's picture

Haven't tasted a greenback lately....wonder what it tastes like?

Mon, 02/07/2011 - 15:43 | 941161 Cash_is_Trash
Cash_is_Trash's picture

Like traces of cocaine.

Greenbacks are better suited for wallpaper, bookmarks, napkins, novelty items and to start a fire.

Mon, 02/07/2011 - 16:07 | 941229 william the bastard
william the bastard's picture

I find everything I buy and use can be acquired with dollars. When I offered to pay my grocer with a krugerrand she frightened me which her concept of providing the accurate change .

Fri, 02/25/2011 - 05:53 | 941635 Dr. Sandi
Dr. Sandi's picture


Tue, 02/08/2011 - 00:42 | 942252 Nostradumbass
Nostradumbass's picture

"Like traces of cocaine."

Wink-wink, nudge-nudge...

Mon, 02/07/2011 - 15:30 | 941125 SpeakerFTD
SpeakerFTD's picture

Here's the problem, friend.  I too have a humble stockpile of foodstuffs, but if things really go down badly, what are the odds you are going to be able to sit quietly in your home, chomping on your dehydrated delicacies?

The value of gold is it's PORTABILITY.   Portable property, as a I recall from one of the Dickens tales.   If things go sour, it is at least as likely you will need to run as you will need to hide in your cellar.   And running with 40 lbs bags of unmilled wheat strikes me as challenging.   On the other hand, with gold, you can carry your bribery money, your eating money, and your fresh start money all in one small baggie.



Mon, 02/07/2011 - 16:19 | 941261 duo
duo's picture

Having an airplane that can land on short grass fields would come in handy, also.

Mon, 02/07/2011 - 22:22 | 942090 chindit13
chindit13's picture

If you've been long gold since it really was a barbarous relic (1999-2000), trade a bit for a Pilatus Porter.  If silver, trade some for a Maule, or install a STOL kit on a beefy C-182 (older models have a better useful load).  And practice your side slips!

Mon, 02/07/2011 - 18:33 | 941640 Dr. Sandi
Dr. Sandi's picture

running with 40 lbs bags of unmilled wheat strikes me as challenging.

That's when you swap your house keys with the neighbor for her van keys. She gets whatever you can't load into the van.

Tue, 02/08/2011 - 00:47 | 942260 Nostradumbass
Nostradumbass's picture

"The value of gold is it's PORTABILITY.   Portable property, as a I recall from one of the Dickens tales.   If things go sour, it is at least as likely you will need to run as you will need to hide in your cellar."

And this is a good reason to consider having a bit of your PM's distributed in another place like Bullionvault allows.

Disclaimer: I am not in any way connected to Bullionvault nor do I benefit from recommending this type of vehicle for wealth preservation.

Check it out...

Mon, 02/07/2011 - 15:33 | 941131 UGrev
UGrev's picture

HAHHHAA.  I always laugh at people like you saying you can't eat gold blah blah blah.. look, when the dust settles and "you" hand me anything OTHER than gold and/or silver in trade, I'd be showing you the door courtesy of my .308. 

Mon, 02/07/2011 - 17:51 | 941545 CynicLaureate
CynicLaureate's picture

If they're inside your door, wouldn't a 45 work better than a 308?

Mon, 02/07/2011 - 18:00 | 941561 DosZap
DosZap's picture

He's into overkill

Mon, 02/07/2011 - 18:24 | 941614 JustPrintMoreDuh
JustPrintMoreDuh's picture

stock pile water,food,pm's ... 

Me and my AK47 will just take them from you.


have a nice f@#$ing day.


Mon, 02/07/2011 - 18:35 | 941651 Dr. Sandi
Dr. Sandi's picture

Sure you will, asshat. Just remember that you don't get a free life after the stupid bitch caps you from behind with her 20 gauge, just because you scared her dog and her chickens.

Mon, 02/07/2011 - 18:55 | 941701 gmrpeabody
gmrpeabody's picture


He doesn't know DICK.

5 week 3 day bitchezzz...

Mon, 02/07/2011 - 19:13 | 941743 JustPrintMoreDuh
JustPrintMoreDuh's picture



I know I'm going to enjoy ventillating ur @ass even more than Dr.Bitch


Happy pre-valentines day.


Mon, 02/07/2011 - 20:47 | 941962 quasimodo
quasimodo's picture

Ventilating with what maroon? Hot air and empty threats will get you nowhere.

Mon, 02/07/2011 - 20:49 | 941963 quasimodo
quasimodo's picture

Ventilating with what maroon? Hot air and empty threats will get you nowhere.

Mon, 02/07/2011 - 20:51 | 941971 StychoKiller
StychoKiller's picture

I figure the local Sheriff and his Deputies will be more than happy to greet you once they find out that I'm gonna be paying them while the Govt gets it's act together.  Hope your AK can shoot in more than one direction at the same time!

Mon, 02/07/2011 - 21:36 | 942032 DaddyO
DaddyO's picture


Bring it...Doh... I'll be happy to show you how things work out here in the hinterlands. Your little pop gun won't do jack as I can see you and reach out and touch you at +1000m. Your little AK starts to get winded at about 200m and by the time you get about half way down my road, there won't be enough of you left for the Sheriff or anybody else to worry about.


Tue, 02/08/2011 - 00:04 | 942223 DoChenRollingBearing
DoChenRollingBearing's picture

Just come on by, you can meet my AK and my Beretta.

After we get done with you, if we are low on food, we'll just carve YOU up, then barbecue and eat you!

We'll cannibalize YOU, bitch!

Tue, 02/08/2011 - 00:52 | 942265 Nostradumbass
Nostradumbass's picture

Nice try troll...

Mon, 02/07/2011 - 15:37 | 941136 Michael Victory
Michael Victory's picture

Mon, 02/07/2011 - 16:17 | 941257 Triggernometry
Triggernometry's picture

Looks like Glen Beck

Mon, 02/07/2011 - 23:30 | 942179 StychoKiller
StychoKiller's picture

Uhh, looks more like Gold Fleck! :>D

Mon, 02/07/2011 - 16:00 | 941191 EscapeKey
EscapeKey's picture

gold and silver is great but you can't eat it 

Thank you for your unique insight. That is a brand new argument, the likes of which we've never encountered before here on ZeroHedge.

In the future, however, it is recommendable you draw further attention to this, which is best achieved through the modest, but yet deliberate addition of exclamation marks.

I have added some exclamation marks below; feel free to cut and paste these for your next such insight you find us worthy of being made aware of.


Mon, 02/07/2011 - 16:14 | 941250 akak
akak's picture


Mon, 02/07/2011 - 16:22 | 941267 JonNadler
JonNadler's picture


Mon, 02/07/2011 - 16:32 | 941293 EscapeKey
EscapeKey's picture

200 WHAT???

Mon, 02/07/2011 - 16:46 | 941337 cranky-old-geezer
cranky-old-geezer's picture

Ohhh sayyyyy $200,000 a pound maybe ...somewhere around QE 15 ...give or take.

Mon, 02/07/2011 - 17:06 | 941408 Hephasteus
Hephasteus's picture

The price of gold.

The price of gold never changes.

Or does it.

The price of gold has changed.

Did it?

The answer is no. Unless it it yes.

NO of course it is. It's price of gold.

Duty call's John Nadler

Mon, 02/07/2011 - 17:09 | 941418 Flakmeister
Flakmeister's picture

200 quatloos

Tue, 02/08/2011 - 09:49 | 942599 ZeroHour
ZeroHour's picture

"Gamesters of Triskelion"?  Or rather, "Gamesters of Earth".

Mon, 02/07/2011 - 17:31 | 941483 tmosley
tmosley's picture

A pound.

Mon, 02/07/2011 - 17:33 | 941494 tmosley
Tue, 02/08/2011 - 02:41 | 942339 Real Estate Geek
Real Estate Geek's picture

I still don't get it.  May I buy a verb?

Fri, 02/25/2011 - 05:54 | 941666 Dr. Sandi
Dr. Sandi's picture


Mon, 02/07/2011 - 15:56 | 941192 traderjoe
traderjoe's picture

The quality of trolling has been declining. Arguments are now running into the absurd:

1) yes, I plan on taking some physical PM's into the worst neighborhoods and widely announcing that I'm holding some gold (I probably should also announce that I am unarmed). 

2) do you really think people that are planning for a doomsday scenario don't consider food, water, and protection to be critical elements of their strategy? Thank you for that brilliant insight. 

Gold is a store of wealth and a means of exchange. You can't eat dollar bills either, and yes I can and do trade gold and silver for products and services in our current monetary environment...

Mon, 02/07/2011 - 16:15 | 941251 william the bastard
william the bastard's picture

Whom do you pay for a service in gold?

Mon, 02/07/2011 - 17:21 | 941447 Burnbright
Burnbright's picture


Mon, 02/07/2011 - 17:35 | 941501 tmosley
tmosley's picture

Not worth it.  Pay three copper pennies for that skank.  Get the crabs for free.

Tue, 02/08/2011 - 09:15 | 942539 Absinthe Minded
Absinthe Minded's picture

Me, if you need electrical work done. NH and MA Master's licenses. Any takers?

Mon, 02/07/2011 - 18:08 | 941586 DosZap
DosZap's picture

1) yes, I plan on taking some physical PM's into the worst neighborhoods and widely announcing that I'm holding some gold (I probably should also announce that I am unarmed). 


You will be murdered immediately.................remember, these are animals, and the law of the jungle will prevail.

When they find you have SOME, you WILL be made to give it all up.Then they will murder you.

People, we have a nation where your life is worth $3.00, or less.

The smartest move you can make is stash, cash, and weapons and ammo, and friends like minded you can trust.

Otherwise your screwed. Our inner cities are Zombie Zones,and best hope to heaven your not caucasion.

Mon, 02/07/2011 - 22:46 | 942121 saulysw
saulysw's picture

DosZap : your sarcasm detector is broken.

Mon, 02/07/2011 - 18:55 | 941704 JonNadler
JonNadler's picture

"The quality of trolling has been declining"


And who's fault is that?


physician, heal thyself!

Mon, 02/07/2011 - 16:24 | 941273 Cyrano de Bivouac
Cyrano de Bivouac's picture

LOP, What are you going to do when the local riff-raff discover you have 6 months of tuna fish, water and MRE's stored in your basement? You can overdue it with gold but diversify-OK?

Mon, 02/07/2011 - 16:35 | 941304 proLiberty
proLiberty's picture

"Some physical gold and silver is great but you can't eat it and in a "doomsday" scenario a better hedge to me still seems to be a years supply of food rations (including a water source) and the means to protect it."


Proper priorities are essential.  After assuring enough food and supplies, then the efforts move to secondary wealth storage in the form of projectile-related precious metals (brass, lead, steel, polymer, etc.).  Proper attention to physical circumstances as well.  We have last week's lesson of those trapped on Lake Shore Drive to graphically illustrate that a well prepared person can still be at the mercy of clueless others.  Look how many SUVs were trapped in the jam.


But in the end, very little of how a person chooses to preserve their lives and wealth will be in the form of food.  The complaint that "you can't eat gold" is worthless and self defeating. 

Mon, 02/07/2011 - 19:48 | 941814 DosZap
DosZap's picture

But in the end, very little of how a person chooses to preserve their lives and wealth will be in the form of food.  The complaint that "you can't eat gold" is worthless and self defeating. 


will be in the form of food. 


And the means to pay, barter for more if you run out.

50 rds of 5.56, may be worth 2ozs of Gold, if you want to live.

Mon, 02/07/2011 - 16:46 | 941339 Slim
Slim's picture

I'm a little gold weary too.  I mean really, a stock is ownership in a going concern business.  How is that paper trash compared to revered gold?  That's like the title to land is just paper.  Hell, go see the assets, watch the business function.  If it's a private business or closely held, make decisions based upon whatever whim you choose - all assets (even gold) that the business owns are your own.


Let's be honest here.  Gold served a major purpose in history for a couple reasons.  It was rare, near universally valued, and best of all portable.  You could sell your crap and quietly walk accross a border with the majority of your wealth (unless you were super weathy).  Even melt it down and obscure any trace of origin.  It's still useful for exactly those same purposes but really, assuming the modern world doesn't compeltely end, we don't revert to the dark ages, and you don't place a supreme premium on moving wealth and transacting covertly - there are better, more convenient and safer ways of accomplishing a lot of that.  And in those situations gold ain't gonna save you either.


In modern times it's an anchor of value, unfortunately determining the value is a tough one and honestly, the holders are more akin to marketers than anything else - which makes sense given negative carry and need to "build the movement" to get prices up and provide an exit.  Of course, no one knows where said exit is so there's kind of an issue there.  If it's 2000oz why not 20,000 or 50,000.  It gets kind of hard to peg it once you are in the realm of 'human desire premium'.  Plus, many of us have the memory of 'human desire premium' decreasing sharply before once the world stabalized a bit.  No guarantee it won't be different this time or that it will be different - so there is a risk here and the unknown price/value is important at the end of the day.  I don't know where that point is but the fervor is starting to smell like any number of bad bubbles before it.

Mon, 02/07/2011 - 20:02 | 941875 DosZap
DosZap's picture

Lets be honest here also,

What you said is true.BUT, always a but.

Whatever the value is, it will have value(the amount/barter power) to be decided.

If you have it, you are never broke.

I see  no Mad Max hitting either, because the Military, along with the 250 million plus++++ guns and trillions upon trillions of rounds of ammo in the hands of the citizenry will not allow it.

There may be a Controlled anarchy, but no End Game.,

My worst fears is IF the Military/LE(like NO) gets involved,and fires on regular citizens, or tries to disarm the public their means of self sufficiency and self defense.

That will be the ultimate SHTF scenario.

This is exactly why you should have a fully equipped self defensive and offensive plan, and  few close partners to back your Six.

And train,have the plan down pat.

I fear the WORST enemy will be the same as the one we have now.

Mon, 02/07/2011 - 23:05 | 942144 Slim
Slim's picture

I agree with everything you've said.  At a minimum physical precious metals are a store of some value in an uncertain world.  After the downright wretched job our politicians have done on our behalf over the last 50 years, I absolutely and unequivocally will not see the country's citizens disarmed.  That is something that was provided for by our country's founders specifically to not allow for tyranical rule, and disarming is the very first thing you do to a conquered people or ones about to be conquered (i.e. Hitler's anti-gun movement in pre-war Germany). 


That said I'm a pretty moderate person.  I have seen the Molon Labe crowd and I could not more strongly advise our politicians not to try going that route.  Plus, lots of more urban older folks picking up CCW permits, probably sensing the instability potential.  As much as some people try to demonize firearms (if you want to kill, you'll grab whatever you can get knife, stick etc...) I think people have turned the corner and been abused a bit too badly at the hands of their government.  Think about that nutcase in AZ - a few anti-gun groups tried to get behind it but it fizzled fast with the public.  I think they are largely done with that crap.  Outside of NJ/CA/MA/NYC - I don't think the population will fall for it or stand for it.  And all it will take in those areas is an increase in crime or violence.  People will wake up to the fact that "when seconds count, the police are minutes away."

Tue, 02/08/2011 - 03:54 | 942362 Temporalist
Temporalist's picture

So you agree that PMs are an insurance policy, maybe the ultimate insurance policy but certainly you wouldn't use those words.  The price of insurance just went up!  It will continue to go up or hadn't you noticed that around the globe PMs, semi-PMs, and food are going up.


Here is a nice chart.  Through the last near 30 years of Fed "monetary policy" (and U.S. deficit spending) there seems to be a trend.  When bottom is hit there is no farther to go.

Mon, 02/07/2011 - 16:49 | 941349 raya123
raya123's picture

You can buy a year's supply of food for several thousand dollars.  Once that is done, put your money in gold and silver.  

Mon, 02/07/2011 - 18:50 | 941689 Gordon Freeman
Gordon Freeman's picture

$600 at Costco.  Check it out

Mon, 02/07/2011 - 20:32 | 941933 Armchair Bear
Armchair Bear's picture

crap food

Mon, 02/07/2011 - 20:57 | 941980 quasimodo
quasimodo's picture

Shit tastes better than the crap they sell there.

Mon, 02/07/2011 - 21:50 | 942051 DaddyO
DaddyO's picture


Survival and sustainability do not, I repeat, do not come in a can. The big box survival 5 gal pails are not very good, but will get you through long enough to get your garden and animal feed stocks going if you have a chance to bug out. However, if you get caught as a refugee with food, guns and other goods, you're toast.

Patriots is an excellent reference on moving towards a fully stocked retreat. It also goes into how to get there from here.


Mon, 02/07/2011 - 17:53 | 941549 Campagnolo
Campagnolo's picture

Some physical gold and silver is great but you can't eat it

One of the most ignorant statement out there. It like saying:

"Money does not give/make you happiness, but it can finance happiness"...same idea, of course you can eat metals, but in a "doomsday" scenario not only Gold and Silver will the way of transactions but other metals, such as: Copper, Bronze, Aluminum...even Iron, just go to Detroit and give all the empty houses..people has taken everything from inside, I mean, Everything!!, to get some cash...for now, later, the transaccion will be between food and cash for a while...until a reset is imposed.

Mon, 02/07/2011 - 15:08 | 941074 oddjob
oddjob's picture

....wiping out tangible supply.


enough said.

Mon, 02/07/2011 - 15:12 | 941082 william the bastard
william the bastard's picture

Underwater mining technology.

Mon, 02/07/2011 - 15:28 | 941119 Azannoth
Azannoth's picture

If it costs 500$ to mine 1oz of gold on the surface how much will it cost to mine it at the bottom of the Ocean ? 10x a minimum

Mon, 02/07/2011 - 15:40 | 941147 william the bastard
william the bastard's picture

Imagine the aborigines astonishment when they first heard a transistor radio?

Mon, 02/07/2011 - 15:59 | 941202 EscapeKey
EscapeKey's picture

So, are you short PMs yet, or just shooting your mouth as usual?

Mon, 02/07/2011 - 16:21 | 941264 william the bastard
william the bastard's picture

$70/tonne offshore cost

$383mm capex (with 17.5% contingency)

Mon, 02/07/2011 - 16:35 | 941303 EscapeKey
EscapeKey's picture

So, that's a 'no' then. You actively recommend investment ideas which you don't yourself pursue. If you don't believe in them yourself, why should we?

Mon, 02/07/2011 - 19:01 | 941718 gmrpeabody
gmrpeabody's picture

You caused me to spit my olive out... it rolled off the table.

Too funny.

Mon, 02/07/2011 - 17:22 | 941449 DiverCity
DiverCity's picture

Are you being intentionally misleading or did you not really peruse the link you posted?  That's US$70 per tonne of ore mined, a relatively small portion of which (150K-200K oz. per year estimated) will be AU.

Mon, 02/07/2011 - 17:36 | 941506 tmosley
tmosley's picture

Imagine their dismay when they couldn't take the food they saw on the TV out and eat it.

You offer illusions, and nothing more (probably less).

Mon, 02/07/2011 - 18:35 | 941646 Bastiat
Bastiat's picture

Yeah, mining's not difficult enough at the surface:  let's try it underwater!!


Mon, 02/07/2011 - 22:50 | 942122 saulysw
saulysw's picture

Yes, the Gulf of Mexico is proof that this stuff is easy.

Mon, 02/07/2011 - 15:30 | 941123 william the bastard
william the bastard's picture

Stock was $2cdn Jan 17 now it's $3.50 !

AAUKY and TCK own 18%

Mon, 02/07/2011 - 16:46 | 941338 TheGoodDoctor
TheGoodDoctor's picture

I think some Russian guy involved with mining or Gazprom and was a venture capitalist for FB also owns a big chunk.

Mon, 02/07/2011 - 16:50 | 941353 william the bastard
william the bastard's picture

22% :-)

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