On Hedging with Precious Metals:
Some observers recommend stockpiling gold or other precious metals
in case of economic collapse and massive inflation. I'm not going
to recommend that to you any more than I'd recommend that you invest
in certain stocks or bonds. It might be “profitable” if
there is a gradual economic downturn, and it might not be if there
is something more rapid or serious.
I'm not going to suggest that you put what money you have into buying
something with no inherent worth or usefulness. If (and when) there
is a really complete economic and industrial collapse, gold is going
to be worth about as much as money – that is, nothing. You can't
eat it, drink it, plant it as seed for crops, or make an axe or a
sickle out of it. (At least you could burn paper cash for heat).
If you do have much extra money beyond your day to day needs, you
could consider buying some of the supplies listed [at the end of Excerpt
Booklet #2]. As of the moment I write this, the price of gold is US$
14,181.90 per kilogram or US$ 441.12 per troy ounce.
For the cost of one troy ounce of gold, I could buy two and a half
metric tonnes of wheat, which would contain more than 8 million calories
and more than 340 kilograms of protein, or enough to meet the food
energy requirements of 10 people for a year (at 2,100 calories per
day).
I could buy ten pounds of organic Butternut Squash seeds, which would
provide 56,000 seeds, each of which could grow into a plant yielding
at least 5 pounds of nutritious winter storage squash (that's more
than 280 thousand pounds of storage squash).
I could buy more than a hundred used metal drums which could be made
into water-purifying sand filters, rainwater catchments, cold-hole
liners or improvised heating or cooking stoves.
For the cost of a kilogram, I could buy twenty acres of decent farmland.
Even if I helped forest grow on half of that land, that's still enough
land to grow food for at least 50 people. I could “buy”
an even larger area of wilderness and prevent it from being destroyed,
protecting the land and creatures on it who would one day feed people
as well.
You get the idea. If I had enough “extra” money to buy
any significant amount of gold, I would spent it on something useful.
It I had more than enough to buy land and supplies for myself and
my community, I would buy enough to share. But, of course, we all
should make the decisions that we feel best about. If you feel confident
that there will be a stable period of gradual economic decline in
which you can use that gold to buy real things, may that’s best
for you. Keep in mind, though, that in such an economic decline the
relative prices of land and other essentials may increase even faster
than gold.
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