Beans, Bullets, or Bullion…Which To Buy Next?

This article is sponsored by a friend of mine, Tom Cloud from Cloud Hard Assets.  We’ve known each other and done business together for the last 8 years.  I say it’s sponsored by Tom because Tom gives a discount to people I refer to him and sends me some money if people buy because of my recommendation.

Right now, a ton of people are getting serious about preparedness or trying to smooth off the rough edges of their existing plans and the most common thing I hear is…”I’ve only got $X.  I know that I need to stock up on food, and I should probably have some gold & silver on hand, but what should I get first?  Heck, it seems like half the ads in conservative magazines and on conservative radio shows are telling me to buy gold, but should I?”

It’s a great question and most people screw this one up massively.  (I did)  I’ve found it effective to look at buying survival/preparedness supplies like Maslow’s hierarchy of needs.  If you’re not familiar with it, it roughly says that in order to be healthy mentally, you need to take care of your basic survival needs before you take care of higher level needs. If you satisfy a high level need like love instead of satisfying hunger and thirst, you might be happy, but you’re not going to last long.

Similarly, there is a hierarchy of survival needs.

Since we first introduced this concept just over a decade ago, it’s been added to several preparedness sites and sparked hundreds of discussions.  As long as you put a link back to this site, feel free to add it to your forum, blog or site to spark conversation.  With every level of the pyramid, skills beat gear and doodads.

Like any model, it’s a work in progress and if you have any thoughts, comments, or refinements, please comment below.  Right now, though, we’re going to specifically address the debate between buying food and buying precious metals…or beans and bullion.

I’ll start by saying that gold and silver are a great way to store/transport wealth and to protect yourself against the devaluation of the dollar (inflation).  But the key phrase here is “store wealth.”  In order to store wealth, you’ve got to have “wealth” in the first place.

If we check in with Webster, we see that the definition of wealth is “The abundance of valuable material possessions or resources” or “abundant supply”.

It would stand to reason that you probably don’t have “wealth” to store until you have an abundance of basic survival items on hand…particularly food and water.

What I mean is that if you don’t have food on hand to last for an extended period of time, why would you buy silver or gold?  Fast forward with me for a second and picture yourself in a survival situation.

You’ve stored up lots of silver and gold…now what?  You can’t eat it.  You can’t start a fire with it.  You can’t drink it.  You can only use it to trade for other goods, and to do that you have to find someone with excess food and disclose the fact that you have gold/silver to trade.

Also keep in mind that in the chaotic period between when a disaster happens and orderly trade takes hold, people who planned ahead and have items to sell will be able to sell them at extreme prices—and I do mean extreme.  I regularly spend time in a place where water from the tap costs about 1.5 cents per gallon, but a gallon jug of water costs $2.50.  There’s no emergency or price gouging going on.  That’s just the current market rate.  And we’ve all seen crazy prices on toilet paper, ammo, primers, etc.  If it was a matter of life and death and we didn’t have any other options, I’d gladly trade our wedding rings for a few gallons of drinking water

Everyone that you approach with gold and silver about a possible trade is going to remember you as the person who has gold/silver.  This is obviously not good from an operational security perspective, although you’re going to have the exact same issue trying to trade/barter with ANYTHING of value.

The longer you go without food or water, the more of your gold and silver you’re going to be willing to give up.  People will instinctively understand your desperate situation and realize just how much leverage they have over you.  Again, this is true with any currency or means of exchange, whether it’s gold, silver, cash, bullets, etc.

The fact is, if you have food and water, you can use it to trade for other goods just like you can with gold or silver…but if you need to, you can always consume it.  Put another way, in a survival situation, you will NEED food, but you won’t NEED currencies.

There’s a common joke among people who don’t like gold.  They say that gold won’t be useful because when you’re hungry, you won’t be able to find anyone with 1000 loaves of bread to trade for your ounce of gold.  This is true…and it makes my point.  If the person with the gold had prepared differently, they would have enough food and the gold would simply be a way to store their excess wealth.

Now this all gets much more complicated if you have to bug out and space/weight are a big issue.  In this case, you may want to take a few ounces of gold/silver (or diamonds) instead of several additional pounds of food, but you still have to find someone with EXTRA food who actually WANTS your silver, gold, or other currency in order to make it worth carrying.

So, am I against precious metals?  Absolutely not.  I fully support buying gold and silver…just at the right time.

So when should you start buying gold and silver?

There is no hard and fast answer, and the answer is going to depend on a number of factors, including your mobility, storage space, number of caches set up, the size/maturity of your mutual aid group, and more.  Everyone is going to have a different guideline, but I will suggest this…I wouldn’t buy gold and silver until you have food, water, fire, shelter, medications, trauma gear, and tools for self defense sufficient to survive a breakdown in civil order lasting a month or more.  Even then, I would suggest spending most of your money on core items for your survival needs and a portion on gold and silver–Unless you can buy the gold/silver for a price that’s significantly below market value.

What should you start buying when you DO start buying gold and silver as a survival item?

There’s no hard and fast answer to this either, but it depends on if you’re buying retail or wholesale.  Let’s start with retail.  If you’re buying precious metals for everyday purchases, I’d suggest buying what’s called “junk” silver.  This is pre-1965 US coins that are made out of silver.  For simplicity’s sake, they trade at a multiple of their face value.  So, if the multiple is 11x, a dime is worth $1.10.  I like them because they don’t hold enough value to be profitably counterfeited, and because they’re easily recognized and widely accepted.

The downside to junk silver, and silver in general, is that it’s bulky.  Ten dimes will set you back about $11, but they’re roughly the same size as $1,600 of gold.  If you’re buying precious metals as a hedge against inflation, or even as an investment, gold is much more compact and portable than silver.  I like US gold American Eagles, Canadian gold maple leaves, Chinese pandas, South African Krugerrands, and Mexican 50 pesos.  All of these except for the 50 peso coins are 1 ounce coins.

I personally don’t buy commemorative coins or old collectable coins, but that doesn’t mean that you shouldn’t.  And I will buy them if I can get them for spot price or slightly above spot price.  Commemorative coins are rarely worth more than spot and you have the added challenge of having to prove their authenticity when you go to sell them.

Collectable coins (usually old, rare coins) do hold more value in a smaller package and have the potential to shoot up in value faster than non-collectable coins, but I just haven’t had the desire to become expert enough to risk money on them.  There is an argument that many collectable coins are protected from confiscation, but I have my doubts that any government that would confiscate gold would pay any attention to confiscation laws that are almost 80 years old.  If any government wants to ban gold/silver, they’ll figure out a way to do it.  If they KNOW that people are buying gold and silver in such a way to get around an 80 year old law, then the new ban will take that into account when they craft their new law.

To come full circle, if you have a limited amount of funds and have to choose between spending money on precious metals or spending money on food storage, I’d pick food storage until you have a month or more set aside, with one specific exception that I’ll explain in a minute.  And, to be specific, I’d spend the money on non-perishable items that you currently eat.  Next, I’d buy some simple bulk foods like rice, beans, and oatmeal, but keep in mind that bigger isn’t always better.  As an example, we can buy 2-packs of oatmeal at Costco for roughly the same price as buying it in 5 gallon buckets.  We can open one of the 2-packs from Costco and eat our way through it before it spoils MUCH easier than we can with a 5 gallon bucket.

Finally, I’d buy freeze dried meals with long shelf lives…but only after you’ve tried them and are sure that your digestive system can handle them.  I’m really not a big fan of all of these “25 year shelf life” foods for non-emergency times.  We have a few dozen MREs, freeze dried camping meals, and freeze dried meals from all of the major sellers that we’re continually testing on hand, but for us it makes a lot more sense to keep a couple months worth of food on hand that we’re constantly eating and rotating through.

When does it make sense to buy gold BEFORE more of the other stuff?

I think it’s smart for everyone to have enough silver/gold on hand to cover at least a month of expenses for a situation where you have to bolt or bug-out.  Hurricane, tornado, and fire seasons happen every year and the reality for most people is that it’s smart to be able to leave your home in a moment’s notice if necessary.

Many people are buying because they think that inflation may be coming.  I don’t know.  Everything WE buy is shooting up in cost, but the “experts” say there’s no inflation…what do you think?

Other people are buying because if they don’t buy now, they may not be able to buy and take delivery in a timely manner anytime in the near future.

Here’s what I do know…

If you’re interested in buying small or large amounts of gold/silver bars, coins, diamonds, or other hard assets, I recommend Tom Cloud from Cloud Hard Assets.

Tom charges a smaller premium than any other dealer that I know of…in person or across the country…and his prices are a fraction of what the companies who advertise a lot have to charge.  To be clear, a lower premium means you get more gold or silver in your hand for the same amount of money.

Tom’s been in the precious metals business for 30+ years and the last couple of weeks have been the single busiest time…ever.  The more anger and frustration there is over the handling of the Coronavirus, the more people are seeking precious metals.

Right now, about 75% of the buying volume is for silver and 25% is for gold…including a HUGE influx of first time buyers.  They’re wiping out inventories, so now may be the best time to buy if you want to take possession quickly.

To ask Tom questions or to order precious metals, please call him at 800-247-2812 or visit his site at Cloud Hard Assets. I am a customer of Tom’s and we have many common friends…friends who have bought millions of dollars of precious metals from Tom.  Promotional consideration has been made for recommending him, so please let them know that Mike Ox referred you so that we know whether it makes sense to do interviews/articles like this in the future. If you do buy from Tom, please let me know how your experience goes with him. Make sure that you talk with a certified professional adviser before doing anything with your money. Precious metals can go up or down in value.

What are your thoughts on the hierarchy of survival needs?

How about your thoughts on precious metals?  The ratio between gold and silver?  And what about food storage?  Have you gone the long-term food storage route, buying more of what you currently use, or a combination of both?  Let me know by posting your comments below.

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1 Comment

  • cal

    Reply Reply July 4, 2020

    what ever you do ,do it now before nov…

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