I’ve heard it said you can make money trading commodities but never by “owning them”.
I am coming to the sad realization that this is true.
I started buying precious metals in 1999 leading up to the y2k event. I am not a survivalist living in a bunker but I do like to consider worst case outcomes and prepare at some level to ensure the health and welfare of my family. Obviously there were no catastrophes as the calendar turned over and life carried on just fine.
I continued to buy silver and gold pieces every now and then but the buying reached fever pitch as the global economies started to fail in 2008. I was buying just about anything I could get my hands on. I would buy junk silver through craigslist. I would buy rolls of silver American Eagle coins on eBay. I would buy gold Canadian Maples through online brokers.
I never expected to get rich with the purchases but I considered them a sort of black swan insurance against major economic meltdown.
I still firmly believe we were much closer to a world wide depression in 2009 than most people ever considered and I don’t “regret” the decisions to buy. I thought about the durability of hard assets and also the projection of leaving something tangible to my children after I pass on from this world. Visions of Scrooge McDuck swimming in coins crossed my mind. The coins could also end up worthless and simply make a cool collectible in 50 years.
The coins represent less than 1% of my total financial holdings, but I think it is time to move on. I can’t ever see a catastrophic event happening in which precious metals will ever be used, but I guess that’s the thing with unforeseen events…they are unforeseen.
What I plan do do is start to move more of the illiquid holdings of coins into a speculative position in cryptocurrency . The coins are basically dead money and worth less today than they were a decade ago. The peak of the global financial crisis saw silver prices around $48 per ounce in 2011 and gold was about $1850/oz. Today silver is $18 and gold is $1288.
Like everyone who is involved in cryptocurrency, I look back with 20/20 hindsight and imagine a world where I spent even a fraction of that money on $BTC in 2009.
Cryptocurrency represents some of the ideals of precious metals with regard to black swan insurance against traditional banking but it is infinitely more liquid. Absent a global EMP event or similar there is little use for physical money. If the world does go all Mad Max at some point, I don’t think I’ll want to live through it.
As I look toward the future, I recognize that almost all human progress rests on the shoulders of technology. Blockchain, digital transactions ,and electronic stores of value will be the future. I would rather place my bets on cryptocurrency than have a pile of shiny coins to look at. Of course I may be wrong again, but I’ll make my bets with the information I have at this time.
Now if I can only find a crypto for gold store!