So What Would You Do if Gold/Silver Truly Skyrocketed?

[Recyclersteve]

It is of course nice to see the way that gold and silver have acted recently. But I want to take things a step (actually perhaps several steps) further.

What if, say, gold hit $10,000/oz. and silver hit, say, $250/oz. That would be a gold/silver ratio of 40, a lot more reasonable than what we've had recently. The knee jerk reaction by many would be to say, "That's incredible. I'm selling now." Ok, then what? Are you gonna put a boatload of fiat currency into a bank account that pays nothing. If you merely sit on the cash, it will likely be making close to or less than zero. If inflation really got to a hyperactive level, you could regret selling. And, of course there was the bail-in situation in Cyprus in 2012-13. That was a mess. Even though it was a foreign country, don't think for a minute that our officials weren't taking copious notes about how things happened in case a similar situation arose here.

On the other hand, if you just sit on the metals and they become super valuable, you need to be concerned about proper storage with a high level of safety and that is not so likely at a bank. Also, what about the cost of insurance for the metals hoard? It would definitely NOT be covered by a garden variety homeowner's insurance policy.

I will say that if I had a physical asset that I was looking to buy (home, land, car, or recreational vehicle), I'd definitely consider attempting a barter transaction with a portion of the precious metals.

Also, it isn't necessarily how high the metals go, but how they act on the way up. In other words, I'd feel much differently about silver at $100 if it took a year of steady movement with several 20-30% pullbacks along the way than I would if it was there next month. This is truly one that I personally struggle with. To me this would be a lot easier if I was either in my 20's or 30's and likely still had a very long time to live or if I was near death. (Without getting too personal, I think my wife would be ok without me. She is a pretty tough person and a survivor who has dealt with adversity in the past.) Anytime in between being very young and on my death bed and it becomes a lot more difficult for me to deal with. What does everyone else think about this?

P.S. No, I am not terminally ill in any shape form or fashion.

[Lemon Thrower]

Its all relative.

I watched a Michael Maloney video 8-10 years ago about asset allocation. His point was you move out of what is expensive into what is cheap. Is gold at $10,000 and silver at $25 expensive or cheap? You touched upon this, but it depends what the alternatives are. Sell your pms to buy stocks at a 40x PE? No thanks. Rental real estate with a 12% return? Perhaps.

Gold and silver have recently risen in fiat terms, but the amount of fiat recently increased in absolute terms, so did anything really change? Soon we will see prices in fiat terms increase.

Your guideposts will be measures of value. A 40 GSR means I would shift from silver to gold if I could do so tax free. Stocks - look at PE and similar value metrics. Real estate - look at cash returns.

[pitw]

Probably do what I've been doing all along.
Trying to have fun and enjoy the living experience.
Ain't got time to worry about what if's when ya could be worrying about what lure to put on.

Sorry,
but you asked.

[Thogey]

Probably do what I've been doing all along.
Trying to have fun and enjoy the living experience.
Ain't got time to worry about what if's when ya could be worrying about what lure to put on.

Sorry,
but you asked.

BULLY!

[Changechecker]

If silver hit $100. and the economy hasn't collapsed or we weren't experiencing anarchy, I would consider divesting some to pay off my mortgage. I would not sell just to convert to government script.

[pitw]

I'd sell it all except for a few ounces and convert the $$ into fishing lodges. Then I'd make a few silver spoons to catch dinner with.

[Cu Penny Hoarder]

I'd dump it out all over my bed and roll in it.

[coppernickel]

I'd dump it out all over my bed and roll in it.

[68Camaro]

When that happens it'll be time to take one last reassessment of our safety preps, because that will mean the dollar has crashed, and all that goes with that. It won't happen independent of a host of bad sh!+ goin' down at about the same time; it won't be a good thing.

[Recyclersteve]

Once I had a roofer offer to do repairs in exchange for silver. The concept of a barter was interesting, but his price was too unrealistic for me.

If silver is, say $250/oz. as mentioned above and assuming there is some semblance of normalcy in suburbia, I’d consider bartering silver for home repairs/improvements. If I could barter for a gently used SUV, that would be pretty cool.

[IdahoCopper]

A few years ago I bought a used Mercedes 190D with US silver coins. I think Ag was around $30/oz at the time. Shortly thereafter that price dropped significantly.

The small car was decent. It was a bit over-powered with its 5 cylinder turbodiesel engine, so it was zippy and fun to drive.

[Cu Penny Hoarder]

Once I had a roofer offer to do repairs in exchange for silver. The concept of a barter was interesting, but his price was too unrealistic for me.

Afterward he tells his nefarious buddies about you and your silver, then you're a target for theft.

If I were to ever barter with PMs, they would not know where I lived. I'd tell the person to meet me somewhere, perhaps a bank parking lot or somewhere with a lot of security cameras.

Also, people walking around in public wearing these WSS "Silver Ape" or "Silver to the moon" T-shirts are begging to be followed home and robbed. You gotta be super careful today.

[Recyclersteve]

Fair point. I would have said something like “Do you want me to go to a dealer and get some for you?” (Instead of having him meet me at my house)