Gyroscopic Investing

I run into quite a few people who have interest in owning gold. But they always ask how a black market gold economy would function. So you have a Krugerrand worth $7000 and want to buy gas and groceries. What do you do? My answer is simply an educated guess. Namely, there will be middlemen who swap gold for currency and/or some other money substitute. I always make sure to mention that at that point, it would be a good problem to have.

What do you think?

I think without a functioning currency and gold dealers, gold bullion is not usable. When you present your gold publicly in a lawless environment, you could be inviting robbery or worse.

There is someone who lived through this scenario in Argentina in 2001 and he wrote a book about it.
https://www.amazon.com/Modern-Survival- ... op?ie=UTF8

There were 'middlemen' who would buy gold from you, but at pawn shop rates. They didn't care if your gold coin was 'internationally recognized' or was of a certain weight or purity. You got cut-rate prices because they knew you were in a tight spot. He said the best thing to have was a bag of gold rings and a gun. Besides, if you need groceries, who will you buy them from and who will be working there? I guarantee that a minimum wage cashier will not be showing up for work to be paid with worthless money. The supermarket suppliers are also not interested in getting paid with worthless money.

What ultimately happened in Argentina was makeshift markets set up just outside of town. They were policed by 'private security' (organized crime who would take a cut of sales) and they were fairly safe because of it. The sellers accepted gold or dollars or sometimes bartered if you had something worthwhile.

JohnnyFactor wrote:There is someone who lived through this scenario in Argentina in 2001 and he wrote a book about it.
https://www.amazon.com/Modern-Survival- ... op?ie=UTF8

There were 'middlemen' who would buy gold from you, but at pawn shop rates. They didn't care if your gold coin was 'internationally recognized' or was of a certain weight or purity. You got cut-rate prices because they knew you were in a tight spot. He said the best thing to have was a bag of gold rings and a gun. Besides, if you need groceries, who will you buy them from and who will be working there? I guarantee that a minimum wage cashier will not be showing up for work to be paid with worthless money. The supermarket suppliers are also not interested in getting paid with worthless money.

What ultimately happened in Argentina was makeshift markets set up just outside of town. They were policed by 'private security' (organized crime who would take a cut of sales) and they were fairly safe because of it. The sellers accepted gold or dollars or sometimes bartered if you had something worthwhile.

That looks like an absolutely fascinating book!

Jim Rickards recommended a monster box of 1 ounce silver coins.

https://twitter.com/JamesGRickards/stat ... 5683230720

From what I had been told during the fall of the old Soviet Union + WW2:
Silver was for trading.
Gold was to preserve your wealth through the crisis.

Hope I never have to find out......

Banks and gold dealers will buy it back. No need for drama.

Everyone should have at least one bag of junk silver to buy groceries and other essentials with. It's hard to make change with a gold coin worth $5000 an ounce. I mean, what is the bank or gold dealer gonna give you to make change with if the currency lacks full faith and credit???

Of course, it won't ever come to that with the USD as the world's reserve currency. It is in the pole position for any monetary reform.

It hurts just to read gold and meltdown in the same sentence.

Wow, interesting book, JohnnyFactor! The current top review (small corgi) makes me want to read it, too.

I never really think too much about surviving SHTF scenarios because practically speaking, I don't see it happening. However, there are different things that can cause a collapse, and something less dramatic than nuclear war or an EMP attack may be worth looking into. Something that you see as being very temporary.

Something that might see a black market in gold crop up.

I often think about what the Venezuelans are going through right now. The last article I read suggested that the problem could be reversed in as little as five years if Maduro could be replaced by someone less stubborn and less of a "Chavista".

But, I can't help but believe it would be better to have a basement full of anchovies rather than gold coins.

MachineGhost wrote:Banks and gold dealers will buy it back. No need for drama.

Everyone should have at least one bag of junk silver to buy groceries and other essentials with. It's hard to make change with a gold coin worth $5000 an ounce. I mean, what is the bank or gold dealer gonna give you to make change with if the currency lacks full faith and credit???

Of course, it won't ever come to that with the USD as the world's reserve currency. It is in the pole position for any monetary reform.

Right... until it isn't the world's reserve currency.