Emergency Money Is Needed in Disasters

In an emergency, one of the nicest things to have is money. How much do you need? What will it buy? What kind of money should you save? Where should you hide it?

My mother was a teenager in 1929, when the banks closed, and the Great Depression began. Like many people, her family had been happily making money and spending it as if there was no tomorrow. In one day, the stock market crashed. The next day, there was no money. Her family had money in the bank, but the bank closed and did not reopen. Their money was gone.

Luckily they had paid off the farm. With the vegetable garden, some animals, and chickens, they had food to eat. They bartered the extra food for other needs. Times were tough, but they survived. When times got good, they began to make money again. This time, no one trusted the bank.

Today, the U.S. Government could close all banks with the stroke of a pen. Due to some legal chicanery, the money in your bank account is legally not your own. The money you have in the bank could become unavailable to you.

If the U.S. dollar lost its value in a monetary crisis, paper money would not hold its value. Paper money is, after all, just paper. The only reason we use this paper as money is that we are all willing to do it. If we agreed that it had no value, paper money would just be paper.

People have recognized silver and gold as precious metals for thousands of years. People consider silver and gold coins as money, while they do not look at silver and gold ingots in quite the same way. For this reason, some people are buying silver and gold coins. These silver and gold coins will never get back into circulation. Folks will hang on to their silver and gold coins just in case the dollar crashes.

The silver and gold coins are not being bought as an investment. There’s no plan to sell them if the prices of silver and gold rise significantly. Instead of being an investment, the coins are insurance – a guarantee that their owners can still salvage something if paper money was no longer valuable. The coins are a hedge against inflation.

Quarters and dimes minted before 1965 had a 90 percent silver content. Unless you are buying beautiful coins for your coin collection, these pre-1965 quarters and dimes are called “junk silver.” They’re 90 percent silver, but if you’re a coin collector, they’re junk.

“Junk silver” is worth more than face value. As I write this, the “spot price” of silver is $14.71 per troy ounce. It takes about 14 junk quarters weighing 0.0715 troy ounces per quarter to equal an ounce of silver. If the $14.71 spot price is divided by 14, each quarter would contain $1.05 worth of silver. The junk quarter is worth more than 4 times its face value.

$1,000 in face value of junk silver coins is worth $4,200 in U.S. paper money. $1,000 in face value is 4,000 quarters. 15 quarters make a stack one inch high. A $1,000 stack of quarters would be 267 inches high, or slightly more than 22 feet high.

A piece of copper pipe with an inside diameter of one inch will hold a quarter in it. Five pieces of copper pipe, each 4-1/2 feet long, would store all 4,000 quarters. You’d need a place to hide these five pieces of pipe with $4,200 worth of quarters. Should the monetary emergency happen, you could spend your silver quarters even if paper money became worthless.

Currently the spot price for gold is $1,233.70. That’s almost 9 times the value of silver. Should you use silver or gold? If you wanted to buy a $7 hamburger, you could purchase it with 7 junk silver quarters. A one-ounce gold Krugerrand from South Africa is worth $1,234 – and you’d get the hamburger plus $1,227 in some kind of change. Silver coins are easier to spend than gold coins.

I’m told banks now report withdrawals of $5,000 or more to the U.S. Government, using the excuse that it might be used to fund “terrorists.” It’s up to you to decide how much money you’d want available outside of a bank. I suggest that you stash away money you could get along without – because you will not want to touch it except in a real emergency. Be careful where you stash it.

The Disaster Guy’s website, www.DisasterGuy.com -- has almost 160 free Disaster Guy Tips on how to prepare for emergencies. His Tips are designed to cost you very little money.