You Can’t Eat Gold

April 10, 2011

by Linda Brady Traynham

Actually, a few people do eat gold and silver after it has been pounded tissue-paper thin and used as a decorative touch on very costly confections. In general, however those screeching about “barbarous relics” are quite correct that we cannot eat gold. Where they err, as one would think obvious even to Keynesians and statists, is that we do not buy gold to eat, and even silver isn’t meant primarily as emergency rations.

The biggest fallacy is thinking that any of our investments other than freeze dried meals are intended for human consumption. We cannot eat share certificates of AT&T. We do not nibble on a new Mercedes, nor do we slice bonds up for sandwiches. Dividends from utility companies are not edible and stacks of hundred dollar bills have never been fried like potato chips to my knowledge.

Back to the beginning:

1. What is money? Money is anything we all agree has value, preferably something difficult to counterfeit, easy to store, that has passed the test of time as desirable to most people, most places, most of the time. It is a medium of exchange, an abstraction that makes it possible to work out the relative worth of chalk, cheese, Calamine lotion, and Coach footgear. It can be–and has been–items as odd as a bronze casting of a sheepskin which the Phoenicians agreed was “worth” twenty-five genuine sheepskins, beads carved laboriously out of quahog shells, and salt, from which our word “salary” is derived.

2. What is the purpose of money?

A. To prepare for the future, either to ensure that there are funds to live on after retirement or to accumulate start-up capital for a business.

B. To pay all bills and current living expenses.

C. Anything left over can be spent joyously or used to increase the amount put into A.

D. If you get enough of it, money is a fine way to gather power.

3. What is “fiat” currency? An artificial form of money, normally made of paper or metal, now created in digital form as well, whose value is dependent upon what we refer to with considerable scepticism as “the full faith and credit” of whoever printed or minted the stuff. The less trustworthy the issuing authority, the more unstable the fiat money and the less it buys as time continues.

4. Why do governments print money that is not backed by anything tangible? Because they can. Because printing money is a lot easier than honest ways to come by wealth. Because such currency illustrates the law of diminishing returns beautifully. It is worth a little less every time more is created, and each new issue benefits the first two or three to hold it (the federal government, the Fed, those who are bailed out, crooked politicians, union leaders, and so forth.)

5. “What is meant by ‘inflating our way out of our debts?’” The more there is of anything the less it is worth. When the government triples the supply of USD extant (not counting the splendid North Korean version) in less than a year, in theory all that additional cash will be spent on activities which bring in tax revenues (contemptuous snort; those are still way down) and this money will be spent to pay government debts, only it never is. The Feds admit the new money isn’t worth as much, speaking of repaying obligations with “cheaper dollars.” Other than it being a totally idiotic notion for our government to counterfeit money, the big problem is that only governments, assorted banks, congressmen, and their friends, unions, and drug dealers actually have more money. You and I don’t have any way to benefit from those “cheaper” dollars. We have the same salaries we did before, and what has actually transpired is that our money is worth less. It buys less. It doesn’t go as far. And that’s why you’re eating hotdogs and meatloaf instead of steak.

6. What can we do about this? Nothing. Well, we can wait for the entire system to collapse, which it will, and we can do our best to starve the tax beasts. That does not mean to evade your taxes because that can get you put in jail and you wouldn’t like it. Curtail your consumer spending. Buy as much as possible from friends, second hand, off Craig’s List, thrift stores, and any place else which does not involve sales taxes. Y’all know how I feel about damnyankees, but there is one saying I approve of: “Use it up, wear it out, make it do, or do without.”

7. How will it help if I cut my spending? Three ways, for sure. You won’t go further into debt, you won’t get a bunch of stuff you don’t need and will have to find storage or display room for, and you will hasten the time when even the tax-and-spend vote-buying crowd realizes that there simply isn’t enough money to pay for all their loony ideas. They’ll have to get tough and tell government employees they can’t retire at 50, they have to hold out until they’re 55…and never mind that ordinary people now have to be 67 1/2 to draw Social Security. Congress can do to themselves and federal employees what they did to the military: cut our “guaranteed” retirement income by 20%. Nobody knows better than former military that government promises are written on water. Congress gave itself a raise of over 5% this year, and declared a three-year moratorium on COLA for old folks, while raising fees for mandatory medicare. Oh…and if you didn’t know, your W-2 next year will list the “value” of your health insurance plan as income, so you can pay tax on it. Won’t that be fun? Medicare costs me over a hundred dollars a month. Last year it cost me over $400 every time I saw a doctor (I need one only rarely), and now they’re going to tax this benefit I didn’t want in the first place. Medicare doesn’t cover glasses, which I do need, or dentists, which we all need. Many of you are paying around a thousand a month (in salary you don’t get) for your health insurance plans, and if Obamacare isn’t cut down by the courts your mandatory coverage is going to cost a lot more than that, taxable.

8. Rule: it is easier to curtail spending than it is to raise income. To determine the true cost of anything, add 50%, because that supposes that you lost a third of your income to taxes in the first place, a gross underestimate. Next year the rate will increase to 39%, plus sales tax, and possibly plus a VAT, goody glee. Sweden, here we come. My first suggestion is to forego things we have all come to regard as “normal,” yet the world lived without for millennia. For example, premium channels on your cable bill. Better yet, cancel the service entirely. You can get better news and weather off the Internet, and probably get a couple of local channels for free. Take a good hard look at your cellular ‘phone bill, and your land line bill. Sure, it is convenient to be able to call every member of the family, and your teenagers will insist you are ruining their social lives if they can’t text, but they will adjust. It’s a novel notion, but you can all read library books or play Monopoly, Cribbage, or Bridge. Work in the garden you should be growing. Cut fast food out of your lives; those expensive calories are very poor nutritional and taste value.

9. Start a war chest with what you save. Use it to stock up on food and things you could use for barter, such as coffee, whether you drink it or not. I’m a hard core Doom & Gloom type, and I think we are going to see very hard times. One of the provisions in the Food “Safety” Act allows the government to confiscate all the food in your home or in any given geographical area, so I suggest caching at least a couple of months’ worth where it won’t be easy to find. No, that is not illegal NOW. “If” things go bad, the new money will be food and survival supplies; no one with any sense will accept Federal Reserve Notes for beans, bullets, or Bandaids. Stock up on other people’s vices. I, for example, cannot abide the taste of coffee, but much of the world feels it can’t start the day without it. Every time I see coffee on sale I buy it, and the price will rise as a crisis spreads and lengthens. Sell it by the can? Oh, no, indeed. Mine will be for sale by the measure, and if I’m feeling generous it will cost an ounce of silver for enough to make two pots. Your neighbors will rediscover old substitutes such as chickory, roasted acorns, and burned bread crumbs, all of which apparently taste as good as they sound. Tea, hot cocoa packets, popcorn, and dried fruit will be highly desirable.

10. Let us suppose that there is a breakdown in the food supply and distribution network, and throw in at least a curfew if not martial law. Then what is money? “Money” will be whatever you have that someone else will trade you what you want for it. Expect to discover the hard way how little diamonds are worth in such situations. As noted, you can’t eat gold; all gold is good for is storing excess value you hope to start over again with once the bad times are through. During the gold rush in Alaska the price of an egg was one dollar–the same dollar that paid a cow hand in Texas for a day’s work. When all you have is all there may be for a considerable time, would you sell a package of toilet paper or a box of Bisquick for three times what it costs now in dollars? I certainly hope not! You can’t eat dollars, Euros, or renmimbi. A classic trade good you can pick up inexpensively now is ordinary soap of any kind–bar soap, dishwashing liquid, laundry detergent, shampoo. A bar of soap caused riots among German ladies in WWII. Forget the nylon stockings! Those were good for a pretty girl’s time, but the hausfrau wanted her seife. I would have a nervous breakdown without at least plenty of legal pads and boxes of good gel pens, because we may well lose either power or the Internet or both. Your fancy new SUV? Valueless when there is little or no gasoline and no place to go if you have some. The stores will be empty. Salt. Plain, old, ordinary, much-maligned Morton’s iodized salt. You’ll die without it, you know. Salt is also good for preserving food, and what are your plans if the power goes out for days and you have a freezer full of meat? Unless you have a grill and plenty of charcoal or a wood stove, your two choices will be to pull out the recipe you printed out ahead of time and “corn” beef, or to pull off a couple of screens, slice the meat thinly, diagonally across the grain, and make jerky. If you sandwich the meat between the washed screens you’ll keep most of the flies off of it. If you have advanced warning jerky can be made in the oven (set at about 200 degrees), in a dehydrator, or in an ordinary cardboard box with a 100 watt light bulb hanging in it. Money is a medium of exchange, and if want and famine stalk the land jerky will be a very fine form of money. If you invest now in at least an 1800 watt grinder and sausage stuffer (don’t forget casings and seasoning) you can make and smoke sausage.

11. Hand lotion might be useful as a trade good. Ladies who are washing clothes and dishes by hand will be glad to have it–and do buy a couple of enormous boxes of rubber gloves. If the very worst happens we may face some very unpleasant jobs, or even have to bury cholera or typhoid victims. A case of Chapstick, all the matches you can get your hands on, small dollar store sewing kits, candles…ordinary, every day things now, but anything you would take on a camping trip will make excellent “money,” including books.

12. What is the value of a can of cat food when kitty says indignantly, “Mao?!” I will go hungry before our three enormous rescue dogs do, but in times of siege and famine cats, dogs, and small rodents disappear rapidly, and isn’t that a jolly thought?

13. Hit the Good Will and pick up sturdy old sweat suits, jackets, and blankets. If you don’t need them yourself, those less prepared than you are will pay top “dollar” for them. Buy woodland or jungle camouflage fatigues (now called “BDU’s) just in case you have to hide out in the woods for a while. A good old fashioned cast iron skillet and a non-electric drip or percolator coffee pot…dollar store Ibuprofin, flyswatters, toothpaste…if you don’t think toothpaste and even a cheap new toothbrush will be luxuries, you haven’t done your homework, and you haven’t considered how very disorganized and unprepared most of the populace is for a major disaster. You can buy good knives inexpensively…now. I think I’ll buy a hundred next time I find some I like for a dollar, because they’re out there.

14. The bottom line is that if the dollar crashes or is devalued “money” will be food, survival necessities, and things you buy now without thought. A tube of lipstick, spare batteries for your child’s iPod, containers for gasoline and water, lots of plastic bags, zippable or twist tie, tinfoil, razor blades, space blankets (currently about three bucks at Gander Mountain), vinegar, bleach, cough drops, birth control devices/products, fish hooks, hand crank can openers, pony tail gizzes, aloe vera gel (good for burns, stings, sunburn), inexpensive New Testaments, anything that would add a little comfort to life.

My system isn’t so much to shop by list as to shop by what is on sale. Over time–and I started four and a half years ago–it all evens out. If what’s on sale 10/$10 is pineapple rings, buy those. Buy anything reasonable that is a form of vitamin C, including the powder or tablets. Scurvy is a horrible way to die, and it didn’t just happen to sailors with Sir Francis Drake. When citrus fruit no longer comes from Hawaii, Florida, and the Rio Grande Valley where do you propose to buy lemons, oranges, and limes? (My plan was to grow my own. Thus far the goats have eaten seven six-foot lemon trees, ripe fruit, blossoms, buds, leaves, and all. Goats will eat ripe jalapenos and just look interested in some more while finishing the leaves. If you have a fireplace, stock up on firewood.)

Haunt Craig’s List and see what is going for well under market value. Two years ago we bought motor homes and travel trailers between $50 and $100/running foot. You can live in one of those if you have to, and you can store your emergency supplies in one, and if you ever have to “bug out” you can be on the road fast. Right now horses are cheap, and we’re planning on picking up a couple more.

When you see something you like and use that stores well–be it brownie mixes, Bush’s Baked Beans, or asparagus–on sale buy at least two or three cases. You may never see it at a good price again. My biggest mistake, early on, was finding 16 oz. cans of cooked mackerel for a dollar. I’m not fond of fish, so I only bought ten cans. That’s an awful lot of protein for the money, and it may come to pass that we aren’t going to be nearly as picky. Has anyone else noticed that not only is tuna sky high but you can’t get it packed in oil anymore? That in water deteriorates faster and has less flavor. Don’t think “That’s enough for now,” something men tend to say. No, it isn’t. Get all you can afford of what is on sale every time it meets the criteria of food value and palatability. DO stock up on whatever your family loves; in our case there are three of us who are crazy about smoked oysters! Those won’t be a popular trade good (although people are going to be craving fats) but we don’t care since we plan on eating all of them ourselves. If you have a cool room or root cellar pick up things that could go rancid–peanut butter, olive oil, safflower oil, even Velveeta will keep a long time if just kept cool. Butter freezes beautifully. Did you know that you can starve to death camping by a trout stream where the fish all but jump in your pan because they are so lean? Your body NEEDS two tablespoons of mixed safflower and peanut oil a day for what are known as “essential fatty acids” because they are necessary for good health.

Spices and condiments! Boredom is going to be a big factor, and I have never understood the Mormon passion for stocking vast amounts of flour, milk, and honey since I don’t know anything to do with them other than make bread and sour dough pancakes. I read today that the “emergency grain reserves” in the US are sufficient to provide every, um, “citizen” doesn’t work…resident with half a loaf of brread. Not good. Not good at all. Learn to use sour dough, but buy plenty of yeast, too. I really like that idea; if you could set up and guard a small stand, you might do a roaring business in flour, sour dough starter, and a basic recipe leaflet. In the old West cowboys would ride a hundred miles to find a lady who could make “bear sign,” known to us as donuts. Laughter…a very expensive government study showed that what men really like us to smell like is a combination of donuts and pumpkin pie! Grandma knew what she was doing when she dabbed a little vanilla behind her ears.

We’re spoiled, people, and we may have to make compromises we aren’t going to like at all. The Dutch, who know at least as much about cheese as anyone, insist that cheese isn’t fit to eat until it starts to mold. Cut the blue-green parts off and eat the rest. The blue and gray molds are harmless; if you ever get pink in your sourdough starter, throw it out. If meat gets slimy or green, feed it to the dogs or the hogs, who won’t mind and won’t get sick.

What it comes down to is that some of us expect a period during which “money” is commodities and consumer goods. If we’re wrong, you can use what you buy over at least half a dozen years. “Expiration dates” are just another Liberal ploy to destroy wealth. If it doesn’t smell bad and the can isn’t bulging (neither of which I have ever seen,) simmer it a while and eat it. A friend who went all out for Y2K is just now finishing up his stockpiles, and all he lost was a few cans of tomato sauce. I solved that problem by buying spaghetti sauce (when it was a dollar a quart.) The taste isn’t quite as good, but it comes in reusable glass jars instead of cans it can eat through, and can be used in many ways, such as pizza, stew, and soup.

My last word of advice is to consider what you find most desirable, what you think others will want to trade for, and what you are willing to accept in return. If you have more than ample food for a year AND can restrain your pity, compassion, and generous impulses, you can consider swapping for gold or silver, but I wouldn’t cut it any finer than that. Sure, it would be pleasant to sell your bargains at very high prices, but you really can’t eat gold, silver, diamonds, cars, furs or even land, the only thing I’m willing to trade for. The funds we put in precious metals are our start-up capital when sanity returns. FIRST we have to get through the crash, and during that time “money” will be food, fuel, medicine, and the ordinary needs of life, including water. So buy a good water filter.

What bothers me most is how few Americans are likely to have a secluded spot where you can raise a garden, at least a few chickens, and a dairy goat or cow. I will continue to hold, unless events prove me wrong, that the coming luxury is sustainable supplies of food and energy and the ability to protect them. Most Americans, a recent study shows, couldn’t last a month on the food they have in their houses–and that supposes the government doesn’t confiscate it and bands of thieves don’t break in. The other thing that bothers me is how many of our readers I have come to hold in admiration and affection, men and women of character and skills I would consider “worth feeding” for what you would add to a prepper colony…but all of you live too far away! You know who you are.

Linda Brady Traynham writes for The Texas Ring and is a favorite contributor to DumpDC.