Get Out of the Dollar and Into Tangibles

Posted on Oct 18, 2012 in Economic News, Emergency Preparedness & Survival

Kevin Hayden –

Every so often, I get an email asking where I would invest my money or why I talk so much about putting my money into tangible goods rather than the stock market or traditional CDs.  From my standpoint, tangibles endure the test of time far better than a fiat paper currency such as the US Dollar.  A fiat currency has value only because of government fiat – or declaration.   And since it is tied to the whims of governing politicians and bankers, it risks inflation, meaning that you will need to shell out more and more dollar bills for the same old product year after year.  Look at the price of gasoline, as an example.  Prices inflate because the dollar is losing it’s fiat value – the Federal Reserve is stretching it too thin by creating more money in circulation with repeated rounds of “quantitative easing.”

See also: Death of the US Dollar Hegemony: Military Intervention, Oil Sales, and the Inevitable Collapse

So what are tangibles, you ask?  Well, that’s a broad term used to describe many things that are physical; something you can either hold in your hand or touch and is worth something.  Your car is a ‘tangible good’ to an extent, although it has an accelerated depreciation tied to it as soon as you buy it.  It will never be worth as much as it was on the car lot.

Now, a quality tractor that is kept in good mechanical condition can expect to “store” it’s value a bit better than your 4-door sedan or minivan.  That’s because they last longer and are built to a higher standard than your car.

Firearms are a very good store of value because they lose very little of their initial value over time.  For example, a Glock semiauto handgun purchased in March of 2004 for $525 can easily be sold for $475 today.  The classic Colt 1911 handgun, something that is considered of high value or higher quality, could have been purchased for $400 back in the 1980’s and because of inflation and the dollar losing its value over time, it would actually appreciate in value.  You might sell it for $600-700 nowadays.

So you see, some items can “store” their value better than others.  Now, if the dollar were to collapse or we experienced massive inflation, those items could be worth their weight in gold to the right buyer and can be easily bartered for their initial value, if not more.  Also, we’ll talk about items that are geared specifically towards helping you get through the tough financial world ahead of us.

Let’s go over some other items that hold onto their initial value or have the potential to make money in the future.

– Land

Land of any type is a good investment in my opinion.  As Will Rogers once said, “They’re not makin’ any more of it!”  Obviously, fertile land with streams or ponds and some trees would be ideal, but that can’t be found everywhere nor in every budget.  Personally, I’ve settled for a nice, expansive piece of pasture-type land surrounded by trees on 3 sides and a long stream that is pond-fed running down the side of it.  The soil is not perfect, but it’s workable.  It’s not as far from a large metro as I would like it to be, but it is certainly a good distance and offers seclusion, privacy, and relaxation.   It is also not subject to any county or city code, ie building permits, electrical permits, code enforcement, etc.  The key theory that you must remember about land – or any tangible – is to purchase what you can afford.  Don’t hurt yourself by entering a bad deal just for the sake of owning land.

– Hand Tools and Implements

These are a must.  Period.  Every home should have the essential, basic tools such as a good hand saw, hammer, drills, prybar, chainsaw, sledge hammer, and an axe.  If you have rechargeable drills, you need to consider how you will charge them in a grid-down situation.  Do you have alternate forms of power such as a solar panel or generator?  And do you store gasoline or diesel for that generator?

Many tools that we use nowadays consume large amounts of power and only perform one function.  Tools of the 19th century will prove invaluable in a grid-down situation because of their simplicity, quality, and multi-function ability.

I suggest you also equip your house or retreat with a quality pick axe, which you will find is invaluable, multiple shovels, and good hand saws.  Stocking up on construction nails and similar items is also advised for projects.  Having spare lumber set aside for those projects can be an over-looked asset, as well.  Many times I see free construction scraps or piles of wood on the side of the road.  It’s worth it to take a look and grab a few good 2×4’s!

– Guns

We briefly touched on this subject at the beginning but I will stress it again here.  Quality firearms hold their value.  Period.  The $150 deal you found on that Hi-Point .380 is not a quality gun.  That is not what we’re talking about here.  Sure, you might retain some value in that because someone out there will buy it, but save your hard earned dollars for a better quality weapon if possible.  Among the brands that I would recommend are Glock, HK, Smith & Wesson, Kimber, Springfield, Colt, Remington, etc.  These are recognizable name brands with a proven track record of quality and consistency.  There are others out there but my point is about quality and common caliber.

Purchasing a rifle in something like a .280 caliber rifle is pointless unless you just want it for personal reasons because likely, no one has ammunition for it or spare parts.  You will want to purchase something that fires ammunition you can find at Wal-Mart, sporting good stores, or the tiny podunk hardware shop in BFE.

I won’t get in-depth about rifles, but AR-15’s, AK-47 variants, hunting rifles in common calibers, Mini-14’s, etc., are good firearms to invest in as both defensive measures and financial stores of value.  If you’d like more specific information, feel free to email me *here*.

– Ammunition

If you follow the same guidelines for ammunition as you did for firearms, you’ll be fine!  Purchase common calibers in order to “diversify” your portfolio and aid in bartering and exchange.  This can include but is not limited to .380, 9mm, .40, .45, .357, .38, .223, .308 or 7.62x39mm, 12 gauge, 20 gauge, .30-06 and more.  One of the most important rounds (in my opinion) and often the most overlooked, is the .22 LR.  As long as you own some sort of personal defensive firearm, such as a Glock or shotgun, your next purchase should be a .22 rifle.  These can be found for $125 – $250, even when buying the name brand models such as the Ruger 10-22 Rifle.  The .22 LR is a small round used for small game, such as rabbits, birds and more.  It’s also a great “plinking” rifle to help improve your shooting abilities.  The best part?  .22 LR rounds are still pretty cheap!  Buy these in bulk!

Like anything else, stick to name brand purchases for easy identification and reliability if you don’t load your own ammunition already.  Although this might be common sense, I’ll say it anyway – purchase ammunition for your primary weapons first.  Rifles should have no less than 500 rounds and 5-10 mags and pistols should have no less than 250 rounds and 5 magazines.  I always recommend more, but this is a nice start, especially with how tight the economy already is.

Next time you’re at the store buying milk or some orange juice, purchase a box of ammo for your weapon.

– Precious Metals

We have all witnessed the spike in precious metal prices.  I’ve been purchasing gold and silver for several years now and advised all of my close friends to do the same starting in 2006.  I advised several people who had large sums of money to invest at least 10% of their money into precious metals and none did.  Silver has risen 100% since I started buying it a few short years ago and gold has increased over 150%.  In addition, precious metals have the ability to be traded around the world.  They are not tied to a fiat currency and mood swings of the global elite.  While metal prices have been suppressed lately, the ability to contain it is starting to unravel as the Fed continues to monetize our debt, foreign countries are exiting out of the dollar and selling off Treasury bonds, and our national output continues to tank.

I won’t sit here and try and tell you how to invest, but I will suggest you look at precious metals – and I mean physical possession!  Online brokers and retailers of physical bullion, such as one of my advertisers – JM Bullion – can offer great prices on individual pieces to help you slowly get into metals.

While you might make money off of some of the indexes, speculation, and funds out there, the point is to enter into a “store of value.”  Your parents probably owned some gold and silver; your heirlooms are made of gold and silver; prized antiques are made of gold and silver… starting to get the picture?

Look to purchase some 1 oz. silver rounds or bars from a name-brand company.  JM and have great selections of 1 oz., 5 oz., and 10 oz. bars from very reputable dealers with a rather low mark-up price.  You can also purchase gold in 1 gram increments, which is what I’ve done for years now.  I don’t know about you, but I can’t drop $1,700 on a piece of gold that will sit in my safe every paycheck.  Instead, I purchase 1 or 5 gram “bars.”  They have a higher markup than a full 1 oz. coin, but with just a small swing in the price, I’ve made that back and then some.

Again, we’re trying to store the wealth we currently have as our primary objective.  Profiting comes second in my opinion.  Maintaining, as opposed to profiting, is certainly better than waking up one day to realize that Japan and China have dumped their US dollar reserves and now your life savings is worth $3.14.  It could certainly happen, friends.

For more information on investments and how the stock market is a volatile playground for suckers right now, hit the search bar up top and look for HFT or High Frequency Trading.  To sum it up, the stock market is being manipulated by computer algorithms that can trade in the hundredth of a second.  They also use these super-computers to place bid interest in a particular stock for lower than it’s trading for and they can do this thousands of times per second.  The market reacts as though a massive group of investors have lower confidence in this particular stock and it begins to bring it down to the bid price.  These HFT computers have the ability to crash stocks within minutes and buy up vast sums of a company for pennies on the dollar sometimes.  When the market recovers or corrects itself through stop-loss or alarms, it’s too late.

Be prepared.

Become aware.

Originally posted Sept 26, 2010

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