Gold vs Silver After an Economic Meltdown

Recently several people have talked to me about whether or not to invest in gold or silver as a hedge against inflation. . I know that some feel that precious metals will not retain their value in the future.  So I am not going to give you advise about investments, but I will tell you a bit about gold and silver that you may find helpful.

Gold versus silver.  I know people that have gold coins and they can be a good investment.  However, in a trade situation after a major disruption to the economy, gold may retain a high value and it may be a problem to make an even trade.  If all you have is a one-ounce gold coin, it will be hard to buy a loaf of bread or some fresh vegetables. You will have no way to make change. If you intend to purchase gold coins, buy denominations of 1/10, ¼ and ½ ounce coins.

Me, I prefer junk silver. To help you with your purchases or trades, I have included the following information:

Junk silver generally refers to pre-1965 circulated silver dimes, quarters, and half-dollars that are comprised of 90% silver and 10% copper.  Major coin dealers generally sell these in $1,000 bags.  The $1,000 reflects the face value of the coins (i.e., the legal tender value of the coins).  People refer to the face value because, regardless of the denomination of the coins, $1,000 bags all contain the same amount of silver which is generally 715 troy ounces (the gross weight of these bags are approximately 800 troy ounces or 54.85 pounds).  These bags are also available in $500 and $250 bags.

Many small coin dealers will sell you silver coins in small amounts.  Check in your neighborhood and you will find a dealer who will sell you silver coins for cash and ask no names.

Forty percent silver bags consist of only circulated Kennedy clad half-dollars minted between 1965 and 1970, are available.  Slightly lighter than 90% bags, these $1,000 face value bags contain approximately 295 troy ounces of pure silver.

  • 1878-1921 Morgan Dollars and 1921-1935 Peace Dollars are 90% silver and contain .7735 troy oz of silver.
  • One dollar of silver dimes, quarters or half-dollars contain 72% of a troy ounce of silver.
  • A dime dated 1964 or before has 7.2% ounce pure silver.
  • A quarter dated 1964 or before has 18% ounce pure silver.
  • A half dollar dated 1964 or before has 36% ounce pure silver.
  • A $1 dollar coin dated 1935 or before has 77% ounce pure silver.
  • A war nickel dated 1942 to 1945 has 5.62% ounce pure silver.
  • A Kennedy half dollar dated 1965 to 1970 has 14.79% ounce pure silver.

A troy ounce is larger than a normal ounce that is used in cooking.

Precious metals such as gold and silver are normally sold by the troy ounce.  An ounce of gold is more than the typical ounce found at the grocery store.  There are two systems for measuring weight.  The one for precious metals is called the troy ounce.

The other is used for commodities such as sugar, grains, and typical grocery items.  It is called the avoirdupois ounce.  Every time you step on the scale at home or weigh food found in the grocery, you use the avoirdupois weight system.  There are 16 avoirdupois ounces in a pound.

Avoirdupois weights – An Avoirdupois pound is equal to about 453.6 grams, or 14.583 troy ounces.  One avoirdupois ounce = 437.5 grains, or 28.35 grams.  One avoirdupois pound equals 16 (avoirdupois) ounces or 453.59 grams.  That is the equivalent to 14.58 “troy” ounces.

When you purchase a 1-ounce silver or gold coin, you are receiving a “troy” ounce.  If you put that same 1 troy oz. coin on a grocery store scale, you will find that it weighs about 10% more than the food ounce you are familiar with.  It will weigh about 1.1 avoirdupois ounces.  Consequently, a grocery store pound that weighs 16 avoirdupois ounces (or 453.59 grams) will contain about 14.58 troy ounces.

I hope this helps you to understand a little more about dealing in precious metals.

Howard

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5 Responses to Gold vs Silver After an Economic Meltdown

  1. Wyoming Steve says:

    For those that are interested, that junk silver quarter as of today is worth $5.25… put that in the context of purchasing a gallon of gas or a loaf of bread today.. When I was in my early 20’s, that same quarter bought a gallon of gas or more… and bread was about 20 cents a loaf..

  2. Matt in Oklahoma says:

    I dont remember overseas anyone on the common man level using gold and silver when things went wrong and the reason is that no one knows what it is worth. Here we see quotes of what it has and what somone thinks it’s worth today but if it all fell apart tomorrow how would I as the common man with no communication understand the value? Today you are speaking a foreign language today using terms like Avoirdupois and Troy so imagine later. We as preparedness people understand the value and weights of some things like pre65 coins but my neighbor does not, nor does my banker, nor does my Dr, nor does my preacher as I have asked in casual conversation which brought me nothing but odd looks. My children don’t know what a mercury dime looks like and there is so much fake bar gold out there right now I dont trust it today much less tommorow. How do I KNOW? There is one who preaches on nickels but if you show up wanting firewood after the collapse do you think I will take an ammo can of nickels? NO The quarter is worth X amount, no it is half of a soda in the machine because if you go to the store right now and try and use it for X amount like $5 it won’t fly and when it collapses it really won’t fly.
    I understand the value of a chicken with eggs and meat, fuel to run stuff, ammo to protect myself, wood for building or staying warm, medical goes without saying but if you show up and say “I have a troy ounce of silver” what does that mean? What does it mean tommorow? The next day?
    I will use the Balkans as an example. The business class and wealthy who had means to travel elsewhere could trade using PMs but the farmer in the village could not. If this happens here then the rest of the world will have fallen too so there will be no place to go to to trade the PMs for stuff. The villagers often had to remain mobile to stay alive so heavy PMs were not an option on the carts of life they hauled. I suppose if you are in a position when things fall and believe you have a market for PMs it might be feasible but after a collapse I will not have a market for my needs nor will I be accepting PMs at least at the start until things stabilize more.
    I appreciate the work on the figures but they are mere words with no value to those around me and thats what it is worth in real life.

  3. GoneWithTheWind says:

    You don’t understand at that is why you are confused. Everything is worth what someone will give or tade you for it. A mercury dime may be worth a single bullet or a pound of rice or it may be worth nothing to the person who has only a pound of rice. But a silver dime will clearly be worth more then a clad dime. I will gladly trade you a couple pounds of rice and beans after SHTF for an ounce of silver. Maybe everyone does not know what it’s worth but a lot of people do. Please contact me and I will gladly take all your silver dimes off your hands since you think their value is mere words.

  4. I would prefer a combination of silver and gold. Gold would be needed for large purchases and reduce the need to carry large quantities of silver. Silver of course as you stated would be better suited for small purchases.

    My wife and I have invested in both metals and keep them hidden away in the event that someday we might need them. Another item to consider would be precious gems as they have always tended to be sought after through centuries of trade.

    However, something that might be overlooked by many would be staple items such as Salt and Pepper. Many wars were fought over Salt prior to the use of Gold as a bartering tool. Having a commodity that is high demand is the trick to preparing and having multiple items to trade is a great asset since no one really knows what people will want if things go south fast.

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