Gold, Silver, and the Spectre of Systemic Collapse

Fate, it seems, is not without a sense of irony
--Morpheus (The Matrix)

Interesting take (part 1, part 2) on whether precious metals would really 'work' if we get a systemic collapse. The author is careful to state upfront that he is considering the worst case scenarios in the spectrum of chance.

He concludes those seeking power in a vacuum of collapse will likely demonize holders of gold, blaming them for 'causing' the collapse. Because most people will not have acquired precious metals for protection, the masses will likely jump on board this bandwagon in hopes that they will be able to get something for nothing.

He posits that metals markets will come under strict control with limited ability to convert metal into anything other than new script. Conversion rates may penalize metal holders, forcing them to give back much of the gains realized during the runup.

Silver, in his view, may have more utility than gold as a medium of exchange. It may be subject to less oversight, plus it is practically divisible into smaller units conducive to barter and routine trade. For this purpose, the author highlights the merits of US 90% silver coins minted 1964 or earlier.

The potential superiority of silver in this scenario is consistent with conclusions I've reached with my 'inner circle.' Gold is better viewed as a store of value to be passed along to future generations. Silver has more value as a medium for barter or exchange.

The other thing I found valuable in the author's work is his assertion that a powerful few, likely those with great influence in the current system, will try to reclaim control in the 'new' system. If that is the case, then the prudent question to ask is how will these people seek to preserve their weath across the transition? If there is a reasonable answer to this question, then perhaps individuals should allocate some resources in that direction as well.

I find it unpleasant to dream inside such a scenario. But prudent risk management requires exploring those scenarios far out in the tails of probability--where chances of occurence are small but the consequences of occurence are large.