Emergency Money

The first thing to understand is that nearly all of the current money supply is in the form of electronic data entries on computers rather than in cash. Most of the wealth of the world is in promises to pay (credit) rather than in cash. Of the approximately $460 billion U.S. money supply, only about 4%, $17.9 billion, in cash is currently circulating in the U.S. (according to the St. Louis Fed figures for June, 1998). The rest is held by individuals, companies, banks and governments in foreign countries. When a disaster hits and the computers in the banks or ATMs go down, or if there are bank runs, all that electronic wealth could evaporate overnight. In the event of a national disaster, the total money supply could shrink by 96%.

Only those who have cash will be wealthy after a national disaster; survival requires cash. Can’t the government simply print enough paper money to replace all the electronic money ? The answer is no, it’s impossible. The presses at the Bureau of Engraving and Printing are already running at capacity 24 hours a day just to replace the paper money that wears out each year. To replace just the $17.9 billion of paper currency currently circulating would take 2 years at the current BEP printing capacity. It would take several decades to replace the entire $460 billion.

So what should you do. There are two possibilities to consider when putting together your emergency money plan, a short term situation, and a long term situation. For the short term, cash and coins are going to be fine. For a long term situation, cash is going to lose its value. Precious metals (gold and silver) will be the way to go for a long term survival situation.

Let’s talk about short term. Again, cash and coin are the way to go. Probably somewhere between $300 to $500 would be a good goal to start with. It should be broken up into various denomination, including lots of dollar bills, and nothing higher than a $50. At least $40 should be in coins; probably quarters. You should begin to get your emergency money together as soon as possible, but NEVER go into debt to do so.

For a long term survival situation, precious metals are going to be better. At some point, paper money will be just that, paper; and will not have much if any value. There are other precious metals, but gold and silver are the most popular, and definitely the most recognizable, which is good in a survival situation because more people may accept them. So how do you buy gold and silver and which should you buy. Gold is worth more per ounce than silver...a lot more. At the posting of this article gold is worth about $1672 an ounce. Silver is just under $32 an ounce. So, it’s definitely easier to store more money in gold. The problem is, in a survival situation, who is going to be able to make change for an ounce of gold. You can buy gold in smaller quantities, so if you are going to invest in gold for emergency situations, I’d buy the smallest amounts you can.  For this reason, silver may be a better way to go. You can buy both gold and silver in bars or rounds of different weights.

Another way to get silver is to acquire certain older coins, often called junk silver. There were certain time periods in U.S. history (mostly up until 1964) when coins were made with either 90% or 40% silver. This is a great way to collect silver, because you can get small amounts that would be easy to use in a survival situation, where making change would be difficult. Junk silver coins are also widely recognized and should make transactions easier. And at the very least, they would have the value of the coin itself, ie a silver quarter would always be worth at least $.25.

So where can you buy gold and silver. There are tons of places on the internet. One of my favorites is apmex. If you have a coin collecting store in your town you should probably be able to buy it there.

I would suggest, as with the cash to have a starting goal of $300 to $500 in gold and/or silver. Eventually I’m shooting for 1 months salary of both cash and precious metals, but one step at a time, right? Again, never go into debt to try to get your emergency money together. Another thing that you should look into is a fireproof storage box to store cash, coins, and precious metals in.

Here is a chart with the most popular silver junk coins. It tells how much silver each has, as well as how much each is worth due to its silver content at the time of this posting.