There are numerous reasons why you should invest in silver as a prepper but most importantly you should invest in silver due to its inherent value and physical nature. There is no point in buying silver from the stock market if you are a prepper as in an SHTF scenario this silver will be like it never has even existed. There is a saying, if you can’t hold it you don’t own it and as a prepper, you should always keep this in mind.
The reasons why preppers are investing in silver are because silver is infinite money, they are shifting from paper to tangible assets, silver has a large industrial demand, investment demand, private investment, monetary demand, and silver has an inelastic price.
A lot of preppers go overboard with buying silver, although investing in silver will for the most part make you a nice profit but you should never go all in. Buy a couple of coins here and there, do not hoard silver coins, at the end of the day no matter what kind of SHTF situation is coming you might end up with a bunch of silver and with very little spare cash. During SHTF situations cash is also extremely important, have some emergency cash nearby, and not in a bank.
Silver has a lot of uses, it can be both a nice investment and a lot of industries also use silver. There are several companies that buy old hardware with the single purpose of extracting precious metals from them, this is a good way to make a profit but it comes with a massive upfront investment. As a prepper, you should have several assets, like silver, cash, plenty of food and ammunition, but you have to balance them out.
If you are living on a tight budget then investing in silver is not ideal, first, try to figure out some way of either lowering your cost of living or increasing your monthly income. Once you have a steady income and some surplus money as well only then think of investing a portion of that money into silver. Remember the most important thing which you can have in an SHTF situation is cash, and silver is mostly for prolonged SHTF situation like a recession ora full-blown economic collapse. If you are wondering how much silver a prepper should have then check out my recent article How much silver should a prepper have ( 222 OZ ).
Our debt-based monetary system must create more debt each and every year in excess of the debt and interest compared to the year before. The more debt money the bankers create the more profit they have, the more money debt the politicians spend the more power they have. If you have read my article Signs of a declining civilization ( Age of Decadence ) you already know that one of the major red flags that a civilization is collapsing is the devaluation of the currency.
The elite will keep using the power of the printing press to maintain their power but ultimately this will only accelerate their demise. There is a mathematical inevitable end to this system as infinite money debt meets the world’s finite resources and ultimately the limits of human faith. The more money in debt chasing after fewer goods and services will cause inflation and ultimately peoples faith in the currency will fail worldwide.
It will become evident that the elite intends to print the currency into oblivion ruining the main function of money as a store value. When this happens people will throw their depreciating currency at any tangible asset they can get their hands on. Precious metals will be the main beneficiary of this. The frightening thing is that not just American citizens that will be affected by this global destruction of paper currency because this will be the first time in human history in which the entire world has become interconnected and dependent upon this FIAT money.
Stop thinking about another American Great Depression and start thinking about the dark ages.
When this current monetary order collapses so will millions if not billions of people as an era of unlimited money comes to an end. Think of the millions that are on food stamps that have no support system to carry them. Think about the billions of dollars in food subsidies ending, food riots, skyrocketing food, and fuel prices globally.
Not your mortgage, not your car payments, taxes, tuition medical bills, or anything else but just the basic necessities like food and fuel. Most will not be able to make this transition and will probably die even before the wars, riots, and violence takes over. This dramatic shift in life will also prevent people from having children in this turbulence. If you want to know how to store your silver then check out my recent article How to store silver safely ( In 10 Steps ).
The shift from paper to tangible assets
Those that understand that there is a major shift out of paper assets into real assets inevitably start with a gut reaction of buying gold. The more I learned about silver the more I saw that it was the only investment for me as a prepper. When you truly understand the fundamentals behind silver you will see that it is simply the best investment out there. The main reason why I invest in physical silver is that it is a physical tangible asset.
When I say invest in silver I do not mean anything else but the real stuff in your hands, if you don’t hold it you don’t own it. Stay away from SLV, unallocated bullion accounts, mining shares, and stick to the physical silver. I would hate for you to be right on silver and wrong in the form of silver. As I have stated above the dollar is mathematically going to collapse and it is the very basis for our entire world economy.
Without a functioning currency and the uncertainty, it brings credit grinds to a halt and so does the payment, markets, and eventually, the world economy will also grind to a halt. People panic and this always leads to war. This naturally leads investors to find value in real tangible assets like commodities. Commodities are real things that we use in our day to day life like pork, corn, cotton, oil, and steel. If you are wondering what kind of silver you should buy then check out my recent article Best silver for Preppers ( Top 5 ).
The problems with most commodities is storage, for a matter of fact, the two best asset classes to be in terms of real inflation-adjusted returns will be food and fuel. These are most essential to humanity and they are hardest to live without. I strongly recommend people stocking up on food, water, and fuel before they buy silver. You will need at least a month’s supply of food and water per person as a buffer for the massive global social upheaval we are going to go through with the collapse of the dollar.
The problem with investing in most food and fuel is storage issues. Most food will deteriorate and become worthless, also storage could be expensive because we are talking about some big dollars. I don’t know about you but I don’t have a grain silo or a fuel storage tank and unless you are a farmer or an oil baron this usually rules out many commodities for the average prepper.
For most metals storage is a big issue, $8k will buy you a ton of copper but just a couple of ounces of gold and this is why precious metals are sought after. Their rarity and their ability to store so much wealth into a small space. Although silver will be a very valuable asset after a major SHTF, there will be other high demand items especially long-lasting canned foods, if you want an in-depth analysis of which canned foods are best for preppers, check out my article Longest lasting canned foods ( Up to 30+ years ).
First and foremost silver is being used as an industrial metal, next to oil silver is the second most widely used commodity ever as it has over 10 000 uses. As technology progresses and expands silver’s usefulness will expand even further, its unique characteristics are unlike any other commodity in the world.
- It is the most reflective of all the metals
- Good conductor of heat
- Good conductor of electricity
- Strongly resist corrosion and oxidation
- Second most malleable and tactile next to gold
- Antibacterial and antimicrobial properties
Silver is generally used in small quantities and its unique characteristics make it irreplaceable.
This demand has almost been dead for the past generation of investors. This demand has a paper trader component to it that simply wants a horse to bet on, these investors want the silver price to be lower. What they really want is to get big swings in the market, these trade anywhere from 40 to 1000 paper ounces of silver for every real physical ounce in the market.
They usually take about 3% of the physical silver off the market when it is traded. This institutional demand is still in its early stages and seems content in the paper chase of the trade market. This is said to grow not only in acceptance but in a worldwide audience and finally in physical metal. Institutions seem to follow the leader and when it becomes apparent that silver is up 20% a year while the stock market is flat it won’t take long for the sharks to smell blood in the water and they will want more exposure to silver and other commodities.
At first, they will play the paper market but eventually, they will want the real thing. Foreign institutional investment demand is quite different than our institutional demand, they don’t seem to be interested in playing the paper chase and they want real physical silver. They seem intent on dumping dollars for real assets. The opening of the Hong Kong mercantile exchange is a good example of this, during the last bull run of silver in the 80s only Western nations participated in the market.
Since then there are 10-20 times more capital in the world and 50% more people living today, now all the world can participate in this silver bull run. China, India, and Russia are leading the charge to buy more and more precious metals. There are a lot of potentially useless dollars floating around the world and they want real tangible assets in return. This type of foreign institutional investment demands higher prices and has the potential for backing the final demand which will catapult silver into the stratosphere.
These investors typically want physical and only dabble in the paper trade market, they usually buy and hold and they differentiate themselves from the other demands that specifically want a higher price for their investment. They planning on dumping their paper assets and getting real physical assets outside of the paper chase. These investors are like ants, constantly taking food off the table and storing it for a rainy day.
This demand is joining the industrial demand and taking real physical metal off the market but unlike the industrial users, the investment demand of private investors strictly wants higher prices.
Silver has absolutely no monetary demand in the world, it is used in things and invested for protection against inflation and there are very few places where you can just buy things with it. I believe that with the mathematically inevitable collapse of the world currencies this new monetary demand will push silver through the sky. Some countries or local communities will monetize silver and as history has shown money goes to where it is most appreciated.
“Paper is poverty. It is the ghost of money and not money itself.” Thomas Jefferson
I have seen bright and intelligent people fail to understand that the electronic digits on their computer screens are not real money. They always do get when they hold an ounce of gold or silver, it is a frightening aspect of our society that we have become so detached from real money that most of us can not even comprehend real money. Do yourself a favor this weekend and go to your local coin shop and just touch an ounce of gold or a big fat shiny bar of silver, then look at that paper in your wallet or worse the digits in your bank account and tell me honestly where would you rather invest for your future. The monetary demand is insatiable as no one can ever have too much money.
All commodities have a self-correcting price mechanism except for silver if a commodity’s price rise too high demand drops off as people seek substitutes or supply rises to meet the demand thus lowering the price. This mechanism does not exist for silver. Silver is typically used in very small quantities and high tech components and there is no substitute for it, this means that the manufacturer or customer will have to absorb any price increase.
Silver is starting to be used in clothing to reduce odors caused by bacteria, what is remarkable about it is that by weight silver only represents 1/40000’th of the total weight of a shirt. When used in such small quantities silvers price is almost irrelevant, over 20 million tons of polyester sportswear are produced every year and the textile industry consumes 1200 tons of silver annually.
Let us say for example the average computer contains 1/10 th of an ounce of silver, that would mean that there is about $2.6 of silver in the computer. Now let us assume that the computer in question costs $1500 the cost of silver would be 10x times higher than at an ounce the same silver in that computer would be $260. Do you think that Apple is going to throw its arms up in the air and cry that they can no longer sell their computers just because silver is too expensive, they will simply raise the price of the computer and transfer the cost of the silver to the buyer.
It is not that just consumer products are at risk, it is the companies, industries, and nations are also at risk. Apple has a market cap of trillions and if a strategic commodity like silver starts having shortages their trillion-dollar empire is in danger. Companies will go into panic buying securing any amount of physical silver they can because their entire value-added business is dependent upon it.
They will not be buying SLV’s or certificates of deposits, only the real physical silver will be good enough. Now you can see that rising prices will actually increase demand and not just the computer industry is relying upon silver but also the multi-billion dollar industries like energy, medical, and the military.
As you can see there are several reasons why preppers are investing in silver, some of them stockpile silver for the rainy days while others consider it as an investment. No matter why you end up buying silver make sure that you buy high-quality silver instead of junk silver.