I posted my view on precious metals already in the "Diapers?" thread, but since there's a thread dedicated to it I'll post here as well. The reason I didn't post here earlier is I wanted to hear other people's opinions on the subject before I posted my same arguement again.

From what I've seen so far, most people here are against the idea buying gold or silver (I don't suggest platinum or palladium the other two precious metals which have ISO currency codes because of their extravagant prices and to some extent obscurity). The arguments against seem to be; gold and silver can be faked, gold and silver are poor investments, and you won't be able to trade gold and silver in an emergency.

For our purposes, the investment value of precious metals really doesn't matter. Buying gold as a financial investment may or may not be a good investment (opinions vary wildly), the real question is whether its a good investment in money against a future emergency ranging from a hurricane to a complete collapse of civilization.

Lets consider precious metals along side other preparedness related purchases. 50 lbs of rice for instance. 50bls of rice will cost you in the neighborhood of 25 dollars (guessing its been a while since I priced rice at the supermarket or Costco). You cannot resell this back to the supermarket, the rice can get wet and rot or otherwise go bad, the rice can be infested with insects or rodents, the rice is bulky and care must be taken when storing it, and the rice will be difficult to carry if you have to pick up and leave. These same risks are true for any food purchase, even MREs, dehydrated and canned goods. A firearm is another example. A gun is purchased either for self-defense or for hunting. If you buy a firearm you also have to purchase a large supply of ammunition or risk not having any. This is a 500-2000 dollar investment. Risks involve include everything from not having anything to hunt or anyone to fight off, meaning your investment was in vain, up to having an unauthorized person get a hold of the weapon and kill or maim them self or someone else.

The risks involved with gold and silver are that it can be stolen from you (possibly with you being killed or maimed in the process), no one being willing to trade for it, the gold or silver could be a fake and the person you are trading to knows this (if no-one knows its a fake, no problem). The first risk can be mitigated by many of the same kind of techniques necessary for either good security of other preparedness stocks. Likewise with the problem of fakes, just as you buy firearms from a reputable dealer or inspect food for problems before relying on it, you buy gold and silver carefully and you won't get burned. Businesses who rely on their reputation will not risk it just to screw one customer. This is especially true of establishments like the US mint. Finally, the question of whether gold and silver will be accepted by people as currency after a disaster.

I will concede that we simply don't know. People who have little may not be willing to trade any of it for gold and silver. But look at the people around you, the people you meet every day and ask yourself if they value gold. Odds are the answer is yes. You could even do an informal poll of people and see what they think (an unbiased poll, asking people if they'd trade their last meal for a shiny coin is not exactly unbiased). The truth is, people like gold and silver. They value it. Its not a transitory value, people have valued it for a long, long time. And regardless of whether or not it makes sense to value metal, people do. The current price of gold may be high, but even if it drops, it will never drop to zero.

Now my arguments for precious metals. First, they concentrate value. Two-hundred dollars in gold makes a very small package. Its easy to carry and I think the value of trade is biggest if you're on the move. How many people here are willing to give someone your address and advertise that you have anything of value? You might find your place broken into or burned down around your ears. Traveling on the other hand, you have the opportunity to meet lots of different people and avoid more hostile areas and

Lets face it, if you have to travel a long distance you cannot carry everything you might need to get to your destination. People who do long distance races like the Iditarod or people who hike the Appalachian Trail have supplies cached or carried to link up points by other people. If you have to bug out, the ability to buy more supplies will be helpful and probably essential. Under most circumstances, good old cash will do this job just fine. Probably better then gold or silver as you pointed out. However, in a large scale disaster, cash will devalue much faster and more readily then precious metal. And gold and silver have a strong psychological impact that may achieve results paper money cannot. Remember, we're not trying to buy from the Gap or Whole Foods. We're buying from people on the street. And as I learned in high school, you can buy with and sell just about anything from/to regular people.

How much have you spent on survival gear or preparations? How does 200-300 dollars of an essentially liquifiable asset compare?