So today Sept 13, 2010, the silver market had a nice little boost in its prices. It rose over 30 cents in a short period of time this morning and it was all I heard about from friends, family, and co workers, for the majority of the day.
My opinion on silver, or any other precious metal, is that it has its place and value, but it also has a priority level, one which many people neglect to realize.
I myself own a fair amount of silver, and in the right circumstances would advocate to others to consider a silver purchase as well, but only once other necessities are taken care of.
I see people buying silver, pounds at a time, when they don't have proper food storage, their security is lacking, and they are renting a house for their family.
Silver is pretty low on my priority list.
In the event of SHTF food is going to control more power. Monetary currency does not exists until everyone has a few basic necessities of life taken care of. If a category 4 or 5 hurricane swept through my part of Florida tomorrow, come the end of the week I would still be trying to gather clean water, medical supplies, extra food essential items that I am lacking on such as spice and seasoning. Now take a look at who I would be buying this stuff from. What do they want in return? The sellers of these goods will probably also need things, food, skills, weapons, ammo, etc. Things that have value but also use. You can say that the value is derived from the usefulness in fact.
Silver has no use at this point (photography, stereo wire, and jewelry will be the last thought of anyone left alive) so the value will be similar. Value will start to appear in PM's only in a time when the basics (food, water, medical, sanitation, weaponry, etc) are taken care of.
Now let’s expand on the scenario. A month passes, people have either died, relied on FEMA, or have found their own way of survival, either through gardening, hunting, fishing, or their personal food storage. At this point, people start to go after the monetary gains, the PM's and such.
I personally feel that for the short time after the SHTF, people are going to pass up the opportunity to get silver, to take advantage of the opportunity to feed and comfort their families.
To edit this post and add to it, as stated in the first paragraph, there is a time and place for an investment in precious metals. To use silver as a hedge against (hyper)inflation, is a solid investment idea. This is what fueled my purchase of bullion. However as I came to learn, in most cases food storage, owning home free and clear, guns to defend your possessions, and money spent on training (wilderness survival, medical certifications, weapons training, schooling) will be much better investments.