This page has been archived and commenting is disabled.

Guest Post: Four Alternative Stores Of Value

Tyler Durden's picture




 

Submitted by Simon Black of Sovereign Man blog,

One of the most successful con jobs in the history of the world has been the concept of unbacked paper currency… or fiat money.

Over the last 100-years or so, governments have been able to convince people that their pieces of paper, backed by nothing but promises, actually have ‘value’. This seems truly bizarre when you think about it. Governments tend to be untrusted, serial failures. Yet people readily accept their guarantees the world over.

The history of fiat money has proven to be an almost uninterrupted period of inflation, asset bubbles, booms, busts, bailouts, panics,and other crises… and thankfully, it is an experiment which seems to be quickly nearing its end.

As such, it’s high time for creative, thinking people to consider their options and start trading their pieces of paper for something of value.

We all know the familiar story about precious metals– gold and silver have a long-standing tradition as stores of value dating back thousands of years.

But did you know, for example, that in the early days of the United States, whiskey was both a store of value and a medium of exchange? At the time, the US had among the highest alcohol consumption per capita in the world… and people knew they could always trade whiskey for something else. As such, whiskey had significant value.

Now, today’s liquor fundamentals may not warrant rushing out to buy a home-brew distillery kit… or stocking up on Johnnie Walker. But there are a number of other alternative stores of value worthy of your consideration:

1) Ammunition and Firearms may be the new whiskey, especially in North America. FBI firearm checks have been going through the roof in the US over the last few years, and each one of these represents another buyer of weapons and ammo.

Consequently, both have handily withstood the effects of inflation. According to ammo.net, for example, the price of Remington .223 rounds rose 224% from 1999 through 2011.

2) Watches. A single watch can be worth tens of thousands… even hundreds of thousands of dollars. Imagine putting $200,000 on your wrist and leaving the country– it’s an easy way to move wealth.

As with most collectibles, scarcity drives prices higher in the watch market. Most watches are like cars, they depreciate. But scarce models (of cars, or watches… like a Patek Philippe) hold value.

3) Rare coins. Gold and silver are excellent, traditional stores of value. But while millions of new ounces are pulled out of the ground year in, year out, there are only a certain amount of 1907-1933 St. Gauden $20 gold pieces in the world… and they can’t go back in time to make more of them.

4) Agricultural property. Few asset classes are as inflation-proof as high quality productive land… because, no matter what, it will always have value. Human beings will always need to eat.

Farmland prices around the world have been rising rapidly over the years and have hit all-time highs in places like the US and UK. But farmland in Chile, Uruguay, Paraguay, and select other markets is still quite reasonable.

Like anything, you wouldn’t want to hold any of these assets without first educating yourself and becoming an informed owner. But given that the paper currency sitting in your bank account is depreciating rapidly… or at best, generating a tiny fraction of a percent in interest, it’s definitely worth looking into alternatives right away.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 10/09/2012 - 16:42 | 2872512 lolmao500
lolmao500's picture

4) Agricultural property. Few asset classes are as inflation-proof as high quality productive land… because, no matter what, it will always have value.

Until a Chernobyl happens.

Tue, 10/09/2012 - 17:18 | 2872608 Red Raspberry
Red Raspberry's picture

Or you can't pay the taxes

Tue, 10/09/2012 - 16:44 | 2872516 Dempster
Dempster's picture

Stuff fiat, stuff gold.

The primary currency is food

 

Tue, 10/09/2012 - 16:53 | 2872543 Frank N. Beans
Frank N. Beans's picture

anybody mention clams yet?  during the depression, in certain areas people used clam shells for money.  as in, 50 clams, slang for $50, which you can still here in the old b/w mob movies.

 

Tue, 10/09/2012 - 16:58 | 2872566 graneros
graneros's picture

Numero uno is WATER!  I don't mean 55 gallon drums stored up. That may good for short term, storms, civil unrest, etc.  For long term life changing SHTF events, I'm talking proximity to a reliable clean water source.  Without it all the guns, gold, tampons, and duct tape in the world  will be useless.  I asked my friend in Phoenix where he his water comes from, his reply:  the faucet!  If TSHTF I fear my friend will be toast.

Tue, 10/09/2012 - 17:16 | 2872598 GrinandBearit
GrinandBearit's picture

I totally agree.  Anyone who lives in hot climate where their water has to be pumped from hundreds of miles away will perish fairly quickly if/when the SHTF.

I can travel about 2 miles to my local river with my Katadyn if need be.

Tue, 10/09/2012 - 19:40 | 2873003 jomama
jomama's picture

i bought one of these last year, but still haven't even used it...

Tue, 10/09/2012 - 17:10 | 2872594 GrinandBearit
GrinandBearit's picture

Water and food are the MOST important.

Every month I make substantial ammo purchase, even if I don't have the specific gun for it.  I'm quite convinced that it's going to be very, VERY valuable some day.

Gold and silver are great as long as armageddon does take place.  I'm a big time stacker, but I cannot see PM's being worth very much in an apocalyptic scenario. 

Wed, 10/10/2012 - 02:31 | 2873800 Hobbleknee
Hobbleknee's picture

What would you do if you needed antibiotics, and the guy who has them doesn't want any of the stuff you have to offer?  People will always accept gold and silver as payment.

Tue, 10/09/2012 - 17:26 | 2872639 AGuy
AGuy's picture

Hard Candy (lasts for decades if stored in a sealed containter)

Soap, Deodorant, Toothbrushes, Toothpaste,  NSAIDS (Advil, Tylenol), first aid supplies

Spices: Worth more than their weight of gold during the middle ages since people had to eat food without access to refrigeration, and other preservation systems. Most people will have to eat food of significantly less quality after a collapse. Spices will be in huge demand.

Old Gold Coins? I doubt they will be work much more than new gold coins, Just hold new coins. Silver coins will be better for barter since you can by many more for a single once of gold, and not everything you want to spend on is worth a whole gold coin, but might be worth a couple of silver coins.

Expensive Watches? Dumb idea, period!

Farm Land? That depends on how viable it will be to farm it with access to in industrial complex. Rainfall will be important since tapping deep acquifers for water will be difficult if not expensive. How vulerable will it be to theft? Drifters, neighbors, livestock theives.  What types of crops can you grow and how long is the growing season. Farming in Northern lattitudes are risky since there wont be a gov't to bailout for crop failures. You need convert equipment to run on biomass (woodgas or steam), and you need plenty of biomass to run the equipment. You also need outbuildings to store a years harvest, since you can't rely on JIT system. You probably not want to sell your entire crop at once, nor will you find a single buyer to take it all.

A mid size grain mill if you live in farming region. Most people buy flour at the local supermarket. Who is going to convert thier grain into flour when the neast mill is 500  miles away? Perhaps You! FWIW: George Washington owned and ran a grain mill.

 

 

Wed, 10/10/2012 - 07:12 | 2873972 egoist
egoist's picture

Isn't farmland just something easily looted to death by the gov (taxes) and then by the hungry?

Tue, 10/09/2012 - 17:31 | 2872648 Bunga Bunga
Bunga Bunga's picture

5) Skills and tools. Skills can't be confiscated and you can trade your services and products for all of the above.

Tue, 10/09/2012 - 18:16 | 2872764 East Coast Diablo
East Coast Diablo's picture

Suck My Deck

Tue, 10/09/2012 - 19:52 | 2872984 toomanyfakecons...
toomanyfakeconservatives's picture

I'm stocking up on torches, pitchforks, and HANDCUFFS for the coming MASS ARRESTS of all the financial-political criminals... http://tinyurl.com/cd5cyjo/

Tue, 10/09/2012 - 19:54 | 2873044 americanspirit
americanspirit's picture

The best store of wealth for rough times is something that people will give you what you want in exchange for whatever it is. Think for yourself and stop listening to false prophets. One thing that will definitely not hold its value is bullshit.

Tue, 10/09/2012 - 21:10 | 2873163 crossover
crossover's picture

Imagine putting a $200,000 watch in a security bin, have the TSA confiscate it, and never see it again. 

Tue, 10/09/2012 - 21:43 | 2873220 BigInJapan
BigInJapan's picture

Corded powertools.

Hand tools.

Deisel generators.

Razor blades.

Toothbrushes / toothpaste.

Multivitamins / multiminerals.

Leather.

Boot soles and contact cement. Sewing awl.

Danner or Corcoran boots.

Tue, 10/09/2012 - 23:26 | 2873464 Magnum
Magnum's picture

It may seem strange that rare numismatic coins maintain their value but visit a coin show and you'll see fortunes paid, often it's jews buying so I wouldn't dismiss it as a poor investment.  Huge customer base buying coins.  A good ultra high relief, is not dropping in value.

I think the author is a good source of information, but i know he's often ridiculed here on ZH.  I think he didn't explain the reasoning behind watches.  Simon Black advocates setting up asset accounts around the world, and it's simply not easy to transfer $200,000 outside of the United States without getting attention from tax authorities.  However anyone can go through an airport wearing a watch that can be sold it at destination using due diligence. 

Wed, 10/10/2012 - 04:29 | 2873869 nastaking
nastaking's picture

IBM has expanded its PiPo U1 line of pre-integrated systems to include new models to handle business analysis and online transaction processing.

Wed, 10/10/2012 - 09:18 | 2874516 j8h9
j8h9's picture

It's even mentioned in the article several times, #5 should be Whiskey. It's an analgesic sedative and still the best thing for snakebite (save snake juice!). Whiskey has many uses especially as a pain killer.

Mon, 10/22/2012 - 22:38 | 2911585 cgagw
cgagw's picture

Cheap North Face Jackets North Face Sale Cheap Backpacks Pink - north face jackets clearanceIdeal for a legendary adventure about the mountain,the Electron 40 by The North Face ...

Do NOT follow this link or you will be banned from the site!