PM Usefulness

There were a lot of comments in response to the PM post the other day, too many comments to address individually, so I figured I would make a post about it. Points made in comments are bold, my response follows.

Having PM’s will get you robbed or killed by government agents or criminals: Of course they can. Anything of value may get you robbed or killed by those who want to take it from you- food, ammo, guns, cash. People have been killing each other in order to take their stuff ever since Oog hit Org over the head with a rock and stole the rabbit he was eating. That’s why there are a couple of things you need to do:

1. The number one thing about all prepping, or owning anything of value, is- don’t talk about what you have or ostentatiously flaunt it. You wouldn’t wear a Rolex into a bad neighborhood (unless you are hunting), so why would you flaunt your PM, ammo, or stored food collection?
2. If critters notice what you have, that’s why you have guns. To keep critters from stealing your stuff.
3. If we are at a point where government officials are stealing your PMs, they will steal anything else you have, as well.
4. If things have degenerated to the point where there are roving bands of criminals wearing colander facemasks are raiding homesteads like a Mad Max movie, none of your preps or stored stuff is going to help you any more than PMs.
5. I can hide 20 ounces of assorted gold coins/bars inside of an electrical box installed inside of the wall with room to spare. $40,000 inside of a 22 cubic inch box is a density that you can’t match with many other means of storing value.

You can’t eat/shoot/use PMs in a TEOTWAWKI situation, so you are better off hoarding beans/ammo/whatever: Being prepared for disasters isn’t just a binary choice between everything is fine and cannibalism. As I said in this post here, there are many things that fall between those two extremes, and this is what I said:

The most likely disaster that we are likely to affect is a personal one. A disaster that affects just you, or your family. A personal disaster may be something as small as a flat tire, or as personally destructive as cancer, or simply being laid off from your job. We cannot know what that disaster will be, but there is a pretty good chance that the best way to fix it will be… money.

A variation of the above claim is The government/grocers/car mechanics/whomever don’t accept PMs. While this is true, PMs are convertible into cash far more readily, at a larger fraction of their acquisition cost, and hold that value better than a jar full of dried beans or a cigar box full of cash.

Having PMs serves a number of purposes:

• It allows me to save a significant amount of money ($15-16 thousand) that won’t lose value due to inflation.
• It is difficult enough to get to that I am less likely to dip into my savings for all but emergencies.
• I am far more likely to need money to deal with any given emergency than I am to need a week’s worth of freeze dried Mountain House. Does that mean storing emergency food is not a good idea? Of course not, but a 6 month emergency fund is far more important and more likely useful for preparedness.

There are people who fake/counterfeit PMs, and are so good at it that even central banks are fooled, so you are better off buying ammo. There are ways to detect fakes by looking at density and using “ringers” or gold analyzers. It can be done using magnetic properties, or even metal analyzers. For example, commenter Fido informs us about this analyzer that costs about as much as a one ounce coin. Using reputable dealers is also an excellent way of preventing yourself from being ripped off. If fake gold is so good that a central bank is fooled, then how would anyone know? If I buy and then sell such a fake, would the person I sell it to be any better equipped to detect the fake than I was? If not, then how does it matter? To the best of my knowledge, I have never bought a fake PM in the 15 years that I have been buying them. As far as being better served buying ammo, see my comments above.

The big problem here is that everyone in the prepping community likes planning for the day when you will be engaging in firefights and car chases through their neighborhood over the last can of baked beans and cans of canned butter, but few people like planning for the day when you are out of work for six months because you ruptured your Achilles tendon while playing tennis with the neighbor, a scenario that is a lot more likely than a scene from “One Second After.” In such a scenario, you can’t convert a case of baked beans or a few bricks of .40 ammo into your property tax payment as easily as you can a couple of quarter ounce Gold Eagles.

That is why you are better off setting up an emergency fund of at least 90 days’ expenses before you do any other prepping. Money is the single most useful prep you can invest in. I’ve been a prepper since 2003 or so. In that time, I have faced a lot of disasters, including hurricanes, job loss, car breakdowns, and even bankruptcy. Not once did I have to dig into the freeze dried foods or the ammo stash. In every one of them, having a couple of months worth of rent money was a life saver. Take the advice for what you paid for it- but there it is.