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Today's fiat money system is in joint peril with other paper assets during the upcoming world wide depression. Unlike the last depression, our Federal Reserve paper money is backed by nothing but air, hot government air, redeemable in like units. And nearly as cheap as air to give to the body economic, Rubin and Greenspan (Plunge Protection Team) will work like crazy to inflate the bursting economic bubble with huge quantities of this air. I would expect the discount rate to drop to near 0% enticing us to borrow more, refinance again and to help them float the market and the world on the sinking U.S.S. Titanic. But eventually this ploy will become unworkable as we find ourselves mortgaged to the hilt and questioning our ability to repay. Mass bankruptcy will follow and the good faith and credit of the U.S.A. will look to be in real trouble to the rest of the world. There will be a flight to quality, dollars around the world will be sold at any price as they go through a confidence crisis. This is the reason that the next depression will eventually end up being inflationary and not deflationary.

Money then is a commodity (pretty printed paper, cheap metal slugs, barter items, and/or precious metal coins) that you can use in trade for other commodities you would like. You choose each day what you will trade your labor or stuff for, to use as money.  You are wealthy only if you own and control the means to sustain life for yourself and possess items that can be traded with others. Paper assets are about to be destroyed in the upcoming months during the stock market crash. These overvalued pieces of pretty paper will not feed or take care of you because nobody will be willing to trade anything worth while for them. These include Stocks, Bonds and any other debt based paper asset like Federal Reserve Notes and your bank account valued in Federal Reserve Notes. Additionally copper-clad coins will eventually be viewed for what they are - Slugs - imitations of the real thing. What then will be used as money?

Four Characteristics Of Money

1.It must be divisible.
2.It must have high value in relation to its volume and weight.
3.There must be recognizability.
4.It must have transportability.

Gold and silver coins satisfy all these requirements.

How much and what kind of money should I own?

To prepare for the coming depression please consider the following:

Newer Coins

You will want to have on hand a significant amount of newer pennies, nickels and copper-clad dimes and quarters.  This is for when limits on bank withdraws begin and cash is scarce. You do not want to use your gold and silver coins then, they are to be used when things start leveling out and the economy restarts. Most people will not initially know the value of gold and silver. Therefore, use the copper-clads until the populace gets educated. If you are on a budget start by collecting a few hundred dollars face value. A wealthy individual could have thousands of dollars face value of copper-clad coins tucked away.

Paper Money

You will want to start by having enough paper cash money on hand to cover at least one month's personal expenses: mortgage payments, car and truck, taxes, utilities, household supplies, etc. If you are well enough off I would recommend that you have much more. According to the experts you must have cash on hand, not in the bank, to satisfy your obligations or you may be forced to forfeit your assets. Also, as the stock market crashes and banks suspend withdraws, you will be able for a short time to buy pennies on the dollar. Additionally, banking services will be non-existent and checks, credit cards, etc. will be useless. An assortment of $1, $5, $10 and $20 bills is recommended (it may be difficult to get change for larger bills). The amount you feel comfortable storing is up to you. Keep the cash where you can easily get your hands on it. You may not have access to your safety deposit box because of an extended bank holiday.

The Transition Period Between Fiat Money To Real Money

Eventually the liquidity crises during and after the bank limits will pass and paper dollars will be devalued (they become worthless), the federal government will begin taking over the failed banks, they will make good on the FDIC and FSLIC government bank guaranty and other government commitments by printing new larger denomination paper money. $500, $1,000, $5,000 and then $10,000 bills will be reissued by the federal reserve in huge quantities, and/or they will circulate a new type of currency. Copper-clad coins, and small bills will become worthless, unless you have wheel-barrels full of them. Run-away Inflation. This will be a hyper-inflationary period for people holding paper assets, paper money and copper-clad coins. When you get wind of the coming currency devaluation dump your paper and copper-clad money for anything of real value. This is the time to already have your silver, gold and any other items you will want and to barter with. Government-controlled rationing will be setup and the Black Market will be in operation.

Silver Coin

Now the importance of having gold and silver coin is evident after seeing the stock market crash scenario and the destruction of paper assets. The only money that is real is that which has intrinsic value. Currency like gold and silver money will be the only real store of money value. The wealthy individuals to emerge from the coming stock market crash and depression will be the ones who have preserved their wealth during the destruction of paper assets. Face it, After having a roof over your head, food to eat and clothes to wear, you will be wealthy only if you have things of real value to others and if you can turn that into opportunity for yourself. Barter any commodity that you can but the two commodities historically that always become real money and a reserve of value are gold and silver.

You will want now to buy as much silver as you can, while the rest of the world is chasing after paper assets. Today, silver is a good value compared to how it will appreciate. Although you will want to acquire gold, silver is better suited for small exchanges and will be used more for the day to day purchases. Get plenty of junk silver, pre-1964 dimes, quarters and half dollars by the bag ($1000. face value), 1/2 bag or smaller amounts. You are basically getting old U.S. silver coins that have been picked through to remove the rare pieces. The price is currently about 5 times the face value. Old silver dollars are much more expensive costing about 10.00 per dollar. Your best value for silver dollars is to get newly-minted US silver dollars, the US mint has been minting new silver dollars since 1986 and they are about $10.00 each and contain 1 troy ounce of 99.9% silver, This is a much larger amount of silver than what is in old silver dollars .714 troy oz..

All these coins are a specific amount of silver recognized by the whole world as to their size and weight. U.S. coins are better than other coins or bullion because of their recognizability, so don't get anything but U.S. gold and silver coins.

Gold Coin

1/10 oz. gold coins should be used for barter on small items but larger than that for which you would barter for with your silver. 1 oz. coins are for the storage of the remainder of your wealth. The best value in U.S. gold coins are the ones being minted by the U.S. Government. US gold coins are currently minted, ranging from about $40.00 for the 1/10 oz. coins to about $305.00 for the 1 oz. coins. There are also 1/4 oz. and 1/2 oz. coins but I prefer either the 1/10 oz. or the 1 oz. coins. The 1/4 oz. coins are improperly valued at $10 and should be $12.50 because of their weight and the 1/2 coin is not a good value because of its increased commission. The 1/10 oz. coin is valued at $5.00 and would be an easy way to buy something worth a fraction less than 1 oz. of gold. The 1 oz. coin is the best way to store large quantities of gold and is the most cost effective method. Each coin contains the stated amount of pure gold in troy ounces plus a small amount of hardening metal to strengthen the coin, each coin weighs slightly more than its stated value.

After socking away new copper-clad coins, paper money and silver coin, you will want to buy with the balance of your money as much gold coin as possible. You will preserve your wealth through the coming paper asset destruction and will emerge as a rich individual.

My Advice.

If you are financially able to put up gold and silver, you should have different types of gold and silver holdings. I would suggest starting your holdings with junk silver and newer US gold eagles then progress to silver and gold bullion coins. Silver and Gold besides being the historical standard for money are also barter commodities. You will want to have the right types of silver or gold coin to transact business. And depending on the situation and who you are working with will depend which silver or gold coin you will use. Some people familiarize with the old junk silver coins and would rather trade for them than for bullion coins. Some people will see your US gold eagles and feel secure that they can count on that coin to be what it says it is and will be more willing to make a trade with you.

During shortages and government controlled rationing a store keeper may have a limited supply of a desperately needed item like medicine that he can only sell at the government set price. Who will get this item? The person next to you with a 50 dollar bill of questionable value or will you with a 50 dollar gold piece that satisfies the government set price for the store keeper and at the same time the store keeper recognizes that your coin has a much higher intrinsic value. Of course you will get the medicine. But if you only had a bullion coin or a coin from another country you may not.

Bullion coins are more affordable and after getting junk silver and newer US gold eagles I would put up plenty of bullion coins, if you have the means to do so. The bullion coins will preserve your wealth through to the other side of the collapse of paper assets and you will have the means to get going financially. Old junk silver coins are usually for dealing with the natives for small transactions during and after the upcoming paper asset collapse. Deciding what to store all depends on your situation, will you have the desired money medium for the opportunity you are pursuing? I suggest you get all of these types of silver and gold coins, the amount of each you get is up to you, but have a least a little of each type.

You only want enough cash on hand to sustain yourself in the event of bank withdraw limitations, and until world wide dollar confidence crashes and the world dumps dollars on the market in a race to get any value they can from it. Other than a pile of small bills to see you through a crisis, cash is a bad thing to hold because of possible hyper-inflation and the fact that it is backed by practically nothing. Obviously the bulk of your investment money placed in a good fund tied to the performance of the stock market is the best place to be right now. But I predict the stock market is going to make a major 50% plus correction starting late this summer, mostly because of deteriorating world economic structures. If you are a savvy investor then stay in high yielding funds until the beginning of the next crash, but be sure you get out at least a day before the bulls run for the doors. This will not be a temporary dip like the one last year was. Remember, Gold and Silver are your wealth preservation instruments and will save your wealth through the coming paper asset destruction. Get gold and silver now while it is cheap, I believe you will not see prices this low later on.

Forces which cause gold and silver to rise in value.

Bank Failures
Rising inflation or the expectation of rising inflation
Devaluation of the dollar
Other currency-related crises
Increased Industrial and Investment demand for gold
Price increase in other commodities
Stock and bond market collapse
A New World War
International tensions

Gold serves as an increased hedge, though volatile in the short-term, against the erosion of the purchasing power of paper money. This is why you want to hold your portable gold coins for 3 -7 years on the average. However, if a deal or situation presents itself that is extremely advantageous such as gold appreciating in value to quadruple or more what you paid for it--consider selling.

Just before the peak of another depression, gold, it is estimated to possibly go to $3000 - $6000 an ounce. And if the president bans gold altogether; then places the U.S. back on the Gold Standard--it is felt he will in many of the bearish financial newsletters, gold will go to $50,000 an ounce! The appreciation in gold is held by numerous other bearish financial advisors.

As for Silver, its "price is closely connected to the same factors related to the value of gold. However, because of the low supply of available silver, it may become as valuable as Gold.

Why is now a good time to buy gold and silver?

Why is Gold currently so low? Because, central banks have secretly been, for over ten years, lending their hoards of gold into the market to investors. Much of the gold said to be in vaults around the world has been leased out to earn interest. Investors lease the gold from the vaults and then turn around and sell the gold to the market, gambling that gold with drop even further. And, with gold going down, they buy it back at a lower price. Then, the investors replace the gold they sold with cheaper gold and make a huge profit.

What this all does is drive the price of gold further down as the central banks lease increasing amounts of it out, flooding the market with supply. They are not dumb! They know what they are doing: causing gold to drop in value and price before the big gold panic in late 1999 and they can make a killing too. They will soak up all the available gold as investors try to replace their leased gold. They will then be sitting upon the entire market available hoard of gold that has run way up in value.

Now, here's the difficulty: The amount of gold leased into the market is the highest it has ever been in history! What does this mean? Simply, the worlds central bankers know that a gold panic is imminent. It will be impossible for all of the gold loans to be replaced. Leasers of gold will panic to find gold to fulfill their contracts, the shrinking supply caused by everyone paying off their gold lease contracts will cause the price of gold to skyrocket. There will be a full-blown gold panic. And what does a gold panic mean; it means that world currencies may devalue even more as gold skyrockets in price--that's what it means. Because there'll be a rush to gold.

Silver has also gone through a similar investment scheme as gold and will certainly skyrocket in value along side gold.

You have three things working to drive the price of gold up:

1.Increasing Gold Lease Contracts
2.Increasing Consumer Demand
3.Gold Investors Needing Gold


"By the IMF's [International Monetary Fund] own documentation, the international banking community is trying to create a new global currency that will be backed by gold valued at between $3,000 to $5,000 per ounce."

--The Economic Outlook; Vol. 7. #1. January 1998.


"To avoid outright economic collapse-Asian governments are devaluing currencies. Currency devaluation is a hidden form of hyper-inflation--the last desperate act before outright economic collapse. How do you protect yourself from currency devaluation? Gold & Silver."

--The Economic Outlook; Vol. 7. #1. January 1998.



Last Updated on 04/14/99 by Darren Perkins