Silver for Financial Preparedness
Should silver be part of your financial preparedness strategy? How can you use silver to help diversify your emergency fund? What kind of silver should you buy, and why? Where is the best place to buy silver?
And our circulation coins were at one time made out of silver, so the change we carried around in our pockets also had inherent value.
This is clearly no longer the case, so I wanted to explain why I feel that silver should play an important role in your financial preparedness strategy.
Before we begin, please note I am NOT a financial advisor, nor do I play one on this blog. Nothing I say should be construed as financial advice. I’m just sharing what I learned as I researched this topic for my family. As with all things pertaining to preparedness, everyone’s circumstances are different. Be diligent, do your own research, and draw your own conclusions.
This post may contain affiliate links, which means if you make a purchase through one of these links, I make a small amount of commission at no extra cost to you. As an Amazon affiliate, I earn from qualifying purchases. See full disclosure here.
What’s Rome Got to Do With It?
I started reading about the fall of the Roman Empire, and how their silver coins were debased over time.
The denarius started off weighing about 4.5 grams, and was almost 100% pure silver. Over time, both the silver content, and the size of the coin were reduced, until by the 2nd half of the third century, the denarius was only about 2% silver.
The debasement of the Roman denarius was one of the factors that contributed to the fall of Rome.
This is effectively what the current governments are doing to our monetary system.
When Did Our Money Stop Having Value?
Here in Canada, up until about 1967, all our coins were made out of 80% silver, so they had actual value. After 1967, the government debased those coins, by making them out of cheap metals, and eliminating the silver content altogether.
The United States phased silver out of their coinage a few years earlier – around 1964.
At this point, the only reason our dollars have value, is because the government says they do.
(Try holding a stack of bills behind your back – can you tell the difference between a hundred dollar bill and a five dollar bill? Probably not. But you could easily distinguish weights of different coinage.)
Unlike silver, which holds inherent value due to its beauty and usefulness, our dollar bills and coins have ZERO inherent value.
Our coinage is no longer made of silver, and our ‘paper’ (now plastic in Canada) money is no longer backed by silver or gold.
It’s effectively Monopoly money. Our faith in those printed pieces of paper is the only thing that gives them value.
So what happens when we lose faith?
What Causes Inflation?
Like most people, I used to think that inflation meant that prices were increasing. Now I realize it’s simply the value of the dollar decreasing. The more money that is created, the less value it holds, and the more of it you need to buy stuff.
It’s tricky to wrap your head around.
Let me explain a couple ways that currency is created, thus de-valuing our money supply.
1. Bank Loans
Contrary to popular belief, loans are not made from other people’s deposits.
Banks create ‘money’ out of thin air, by loaning out money they don’t have – and the more money they create, the less it is worth.
When you apply for, and receive, a loan, the bank ‘creates’ that money by typing digits on a screen.
If you ask for a 10,000 loan, the bank creates that $10,000 basically via your signature. Your signature is your assurance to the bank that you will pay them back that money, and thus, that money exists.
The same is true of a credit card. The bank isn’t ‘loaning’ you the available credit you have on your card. You created that money into existence by promising to repay it.
Every dollar you borrow into existence dilutes the value of the existing monetary supply.
(Just one of the reasons I’m opposed to debt).
2. Government Bonds
The government can also create money out of thin air (and thus, decrease the value of the dollars you hold in your bank account) – by selling bonds.
Yes, those bonds you are holding in your retirement portfolio, or that your parents bought you when you were born, are inflating the money supply and decreasing the value of your dollar.
Bonds are debt instruments.
When you purchase a bond, you are making a loan to the government. As a thank you, they promise to pay you back with interest.
And by “they”, I mean you. You will be repaying those bonds (plus interest) with your future tax dollars.
And your loan to the government has just injected imaginary money into the monetary supply.
It’s like the bank loan situation, but in reverse! You have just become the lender, and the government the borrower.
We are sold bonds on the premise that they are ‘guaranteed income’ – because you’ll earn interest on that loan you made to the government!
What they don’t tell you, is that because you’ve just increased the monetary supply, now your dollars are worth less, so the interest is moot.
You’ll have to spend more of your dollars to buy stuff.
(Not to mention the fact that the interest comes from… you. It’s your tax dollars that will be paying that interest).
3. The End of the Gold Standard
At one time, banks and governments could only circulate as much currency as they had on reserve in gold. This was known as the ‘gold standard’. This drastically reduced the risk of inflation, because money could not be created out of thin air. There had to be something backing it.
In 1971, Richard Nixon abolished the Gold Standard in the United States.
Since then, the US dollar has lost 99% of its purchasing power.
Canada went off the Gold Standard much earlier, in 1929.
The Canadian dollar lost more than 94 per cent of its value between 1914 and 2005. (Source: The Bank of Canada).
Whatever Happened to Penny Candy
If you’d like to learn more about our monetary system, in simple-to-read terms, without all the confusing financial jargon – I highly recommend the book “Whatever Happened to Penny Candy“.
When I began exploring our monetary system, I decided it would also make an excellent topic to cover in our homeschool.
I ordered this book, and we did it as a read-aloud. I made it fun – at the end of each section or chapter, I would ask the kids a question (to make sure they were paying attention). Whoever answered first, I would throw them a nickel! It’s amazing how much kids will participate for a nickel! Even after I explained that a nickel isn’t real money. lol
I loved the storytelling format, and how clear and easy it was to understand. Even if you don’t have children, I would recommend picking up this little book! It’s a quick read (you could easily read it in a day).
By the time we were finished with the book, all 3 kids had decided to pull their money out of their bank savings account, and buy silver coins instead.
Buy Now → 
Why Buy Silver for Financial Preparedness
With the government currently printing money like it’s toilet paper, high inflation is inevitable.
I feel it’s a wise time to start trading some government paper money for real money: silver.
After doing tons of research, I bought my very first pieces of silver.
And let me tell you, I had no idea how different it would feel to hold a pure ounce of silver in my hand. Real money.
Silver has been used as money for thousands of years, so holding it made me feel like I was holding a piece of history.
1. Silver is REAL money
Unlike currency (those dollar bills in your wallet, or those digits in your bank account), silver has actual, intrinsic value.
To learn more about the difference between money and currency, I encourage you to watch Mike Maloney’s The Hidden Secrets of Money (free on YouTube).
It’s a fairly long series, but very well done, and explains how our monetary system works, much more in-depth than this blog post can.
2. Diversify Your Emergency Fund
The general consensus is that everyone should have 3-6 months of expenses saved in the bank. This money should not be invested, but rather sitting liquid in a savings account.
The purpose of this account is an emergency job loss fund – if you were to become seriously ill or injured, or lose your income for a period of time, this fund would help get you through until you get back on your feet again.
At one time, banks actually paid interest for letting you store your money there. However, most banks are currently paying less than 1% interest, if anything at all. You’re essentially loaning them your money for free.
The other problem, is that inflation is actually eroding the value of your money the longer it sits in the bank. You want it liquid for emergencies, but you also don’t want it losing value while it sits there.
While it may appear that the amount of money in your account is the same, or even a few cents higher if you’re lucky enough to earn a tiny bit of interest, the truth is, inflation is stealing your money.
Keeping some of your emergency funds stored at home in the form of silver is an excellent hedge against inflation.
While it’s *slightly* less liquid (you’d have to take it to a coin shop to trade it for cash), at least it’s not losing value, and there is even a chance it could go UP in value.
And trust me, your fiat dollars have a 0% chance of ever going up in value. There is only one direction that fiat currencies travel, and that’s down.
2. In a financial crisis, you may not have access to your money in the bank.
Many of us have not seen this happen in our lifetimes*, but if there were ever to be a huge financial crisis, you may not have access to the funds in your bank account. (If you haven’t heard of this, read about what happened with the banks at the start of the Great Depression).
I know many people believe that FDIC insurance protects you from losing your money, but the FDIC wasn’t designed for wide-scale financial disasters. In fact, the FDIC only has enough money to cover a small fraction of the funds that are on reserve at the bank.
*Edit: in 2022, may of us DID see this happen, during the Canadian Trucker Convoy. The Canadian government froze bank accounts of not only truckers, but anyone who was deemed a supporter of the mission. People had zero access to their funds, and, in some cases, their bank accounts were permanently closed. This proves that once your “money” is in the bank, it no longer belongs to you.
3. Money in a Bank Does Not Belong To You
I think many people mistakenly believe that when you put your money in the bank, it gets stored in a vault, and you can simply retrieve it whenever you want it back. We’ve all been taught that banks are a place of safekeeping for our money and valuables.
However, the truth is, that once your money is deposited into the bank, that money is now owned by the bank, to do with as they wish. You have effectively become a creditor to the bank. You have loaned them your money, at your own peril, and they may, or may not choose to return it to you.
In fact, during the above-mentioned trucker convoy period, banks were limiting cash withdrawls, and asking an awful lot of questions about why you were taking your money out.
If it was, in fact, your money, would the bank be entitled to ask these questions?
4. Fractional Reserve Banking
The bank only has to keep 10% of your money on reserve, and can loan out the other 90% (this is called fractional reserve banking).
*UPDATE – Fractional reserve banking has been abolished. What this means, is that the banks are no longer required to have ANY reserves on hand. They can now loan out or invest 100% of “your” money.
So if, suddenly, everyone tried to take their money out of the bank at once, there wouldn’t be enough. The bank can declare a bank holiday (shutting their doors for a period of time), OR they can limit how much you can withdrawl in a day or a week.
I have even recently heard of some banks going “cashless”. Meaning, they keep zero cash on hand, and you cannot deposit or withdrawl any cash. Everything is simply digits on a screen.
Many of us have experienced trying to withdrawl cash from the bank, only to be told we had to place an order and come back in a week.
The most famous incident was the Bank Runs during the Great Depression. Thousands of people demanded their money, only to be told they didn’t have it.
During an emergency situation, this is obviously not ideal. This is why I feel it’s a good idea to not store ALL of your money in the bank.
In a wide scale financial disaster, the bank doesn’t have to give you your money back – they can actually keep it to repay their investors first.
You obviously don’t want to keep a ton of cash at home, so the bank is the ideal place to store it, especially if it’s a large amount. However, I would recommend trading some of that money for silver so you can diversify your emergency fund, and be more financially prepared.
And when I say silver, I mean real, actual silver that you hold in your possession. Not digital silver in the form of ETFs. For preparedness reasons, you want physical possession of your precious metals.
5. You Can Barter with Silver
As more people learn the value of silver, it can become a bartering tool. Although I recommend keeping cash on hand as well, many people recognize the value of silver, and may be willing to trade goods for it.
Many nay-sayers will say that in a crisis situation, you ‘can’t eat silver and gold’ – which is very true! Which is why I also advocate building for building an emergency food supply, and preparing in other ways.
However, we also cannot eat currency, but it’s still a useful tool.
The reason money was invented in the first place, is because bartering is limited:
- You must have what someone else wants
- They must have what you want
- The two items must be roughly equal in value
With money (or silver), you can purchase an item with your silver, and that person can take your silver and purchase what they need from someone else. You are no longer limited to a 1:1 exchange.
6. Silver Helps Protect You Against Inflation
Unlike government currency, silver is inflation-proof.
When silver goes up in price, what it actually means is that the dollar is losing value.
Because it now costs more dollars to buy the same amount of silver.
When you see the cost of silver rising over time, not because silver is worth more; it’s because your dollar is worth less.
Yes, the price of silver fluctuates, but when you consider the buying power of silver 50 years ago compared to now, it’s almost identical. Meaning what you could buy with an ounce of silver in 1970 is effectively the same as what you can buy with an ounce of silver today.
For example, in 1918 in the USA, a gallon of gasoline was worth 20 cents, or 2 US dimes (which were made of 90% silver).
In 2011, a gallon of gas was $5.00 a gallon, which is the equivalent value of 2, 90% silver dimes (which were also worth $5.00).
Gas isn’t getting more expensive, currency is losing value. But silver maintains its purchasing power. (Source)
7. We Are Moving Toward a Cashless Society
Whether we like it or not, the writing is on the wall: the government is moving us slowly toward being a cashless society. That means every dollar we spend, will be traced and tracked. You won’t even be able to buy a stick of gum without the government knowing about it.
Here is why this is a problem:
In a cashless society:
- you won’t be able to tip in cash
- no more slipping $20 into your grandchild’s birthday card
- no more garage sales, or private selling of any kind
- you won’t be able to keep a stash of cash at home in your safe, in the event of an emergency
- all your ‘currency’ will only exist in the form of digits on a computer screen
- government can limit access to those digits on a whim (as we saw during the trucker convoy)
- magnifies economic inequality (many people do not have access to banks for various reasons)
- loss of privacy – every cent you spend will now be able to be tracked
Truly, it’s not a matter of if we go cashless, it’s a matter of when.
Owning silver allows you to retain some financial freedom, as it is highly barterable. (Remember, it wasn’t all that long ago that our coinage was silver!).
8. Silver Helps You Save
This is one of my favorite reasons for saving in silver!
There is something called Gresham’s Law, which basically explains how ‘bad money drives good money into hiding’.
When you hold real money in your hands – silver – you don’t want to spend it. It’s so precious to you, that you want to keep it. And get more of it.
You don’t want to take your ounce of silver (good money) to the store and buy yourself some snacks. You’ll spend your fiat (bad money) on that, and keep the silver coin in your pocket.
There’s also a bit of friction involved in trading your silver for fiat. Most stores would look at you like you have 6 heads if you tried to buy something with a silver coin.
(Try explaining to the grocery store checkout clerk that the silver quarter you just handed them is actually worth $6.00!).
And legally, the coinage, regardless of silver content, is only worth its face value. So whatever is stamped on the front of the coin is what the store would accept as its value.
So, in order to spend your silver, you’ll first have to head to your local coin shop, swap it for fiat, and then take your fiat to the store to buy snacks.
Let’s face it, you’re not going to do that (unless you’re really, really desperate).
This is what makes silver an ideal savings account!
9. Silver is Under-Valued
Historically, silver has been valued according to how many ounces of silver could be traded for an ounce of gold.
This is known as the gold-to-silver-ratio (or GSR).
It’s calculated by dividing the price of gold by the price of silver.
It’s also roughly equivalent to how many ounces of silver are mined compared to how many ounces of gold. (Their finite supply is what gives them value).
During the Roman empire, the silver-gold ratio was established at 12:1 – meaning you could by 1 ounce of gold for 12 ounces of silver.
Today, the GSR is roughly 85:1. Meaning it takes 85 ounces of silver to buy one ounce of gold.
This indicates that silver is presently very under-valued in terms of fiat dollars.
If silver ever reaches its true value, then the silver you stack will be worth a whole lot more in terms of dollars.
What Kind of Silver to Buy for Financial Preparedness
One of the benefits of silver, is that there are so many forms you can buy it in!
There are rounds, coins, bars, shot, and junk silver (junk silver is dimes, quarters, and half dollars that were made of a high percentage of silver until the mid 1960s). And each of these comes in a variety of weights and styles. It can actually be a little overwhelming when you’re first getting started.
1. Silver Coins
I would recommend keeping it simple in the beginning, and just purchasing your sovereign country’s 1 ounce coin.
In Canada, it’s the Canadian Maple.
In the US, it’s the Silver Eagle.
Many sovereign countries will have their own one ounce coin, so do some research to find out what that is.
Why Go With Your Country’s Sovereign One-Ounce Coin
- They are easy to find
- They are recognizable, all around the world even, making it an excellent way to store silver for preparedness reasons
- A sovereign coin is legal tender
- They are one troy ounce of silver, and smaller denominations would be more useful if you needed to use your coins to barter (as opposed to large bars of silver)
- It’s illegal to counterfeit a sovereign nation’s minted coin, so there is very low risk of getting a fake
- For the above reason, you can buy or sell them at any coin shop
- Silver coins are beautiful to hold and look at
- Since it’s a minted currency, there is no tax when you buy a sovereign coin – because it’s money. You’re just trading one form for another.
- Canadian Maples are .9999 silver (also referred to as 4 9s fine) – the highest purity of silver coin in the world. This level of purity can be converted to colloidal silver, which is very useful in preparedness situations.
You can distinguish a sovereign coin from other types of silver, like rounds, because it will have a currency denomination on it.
Obviously, the value of the silver is much higher than the denomination stamped on the coin. The denomination that’s stamped on the coin is what is known as ‘face value’, and is what tells you the coin is minted currency.
Only government mints can create coinage.
A silver round looks like a coin, but does not have a face value stamped on it. Anyone can create a silver round.
Many people prefer to stack rounds rather than coins, because rounds have lower premiums (you can buy them less expensively than coins). Many people feel that ‘silver is silver’.
However, if you’re stacking for preparedness reasons, I prefer to go with recognized coinage.
People might not accept your rounds, as unless they have the equipment to test your round for its silver content, they have no idea if it’s pure silver.
The same goes for bars.
A coin will be recognized and accepted.
2. Circulation Coins
Circulation coins (also known as “junk silver”) are another great option for silver stacking.
Most people are familiar with silver circulation coinage, as it wasn’t all that long ago that it was still in circulation.
In the US, dimes, quarters, and half dollars were 90% silver until 1964.
In Canada, silver dollars, half dollars, quarters, and dimes were 80% silver until 1967.
When to Buy Silver
The best time to buy silver was 20 years ago.
The 2nd best time to buy silver is TODAY.
(Cliché, I know, but true!)
If you haven’t started stacking silver yet, do not pass go, do not collect $200 (fake government) dollars, or at the very least, go trade it for some silver.
I like to keep an eye on the silver spot price, to know when it’s a good time to buy. (I like to use Kitco – both the website and their app are excellent).
When the silver price is high, I stack up fiat (cash), until the price of silver comes down, and then I trade it for real money (silver).
Some people prefer to do something called Dollar Cost Averaging, or DCA.
With DCA, you would buy the same amount of silver each month, regardless of what the current “price” is. (Remembering that fiat pricing of silver is arbitrary – an ounce of silver is always worth an ounce of silver).
With DCA, you average out your purchase cost over time. Some times you will buy low, others you will buy high, but in time, it averages out.
You can choose to either purchase a fixed number of ounces per month, or spend a certain number of fiat dollars per month.
Whether you choose to save up and buy low, or DCA – just start! I would recommend going and buying your first silver coin TODAY.
Once you hold REAL money in your hands, you will instantly and innately know the difference – and you will want more.
Where to Buy Silver
There are 2 places I would recommend buying silver:
1. Your Local Coin Shop
First, I would suggest looking to see if there is a local coin shop in your area.
Getting to know your local coin dealer is an excellent plan, especially if you’re looking into silver for preparedness. You’ll want to build a relationship with your dealer, so that if the time comes that you need to trade some of your silver coins for currency, you’ll already have an established relationship.
Another reason to use a local coin shop, is because you can literally buy one coin at a time.
When you’re first getting started with silver, it can feel a little overwhelming. I walked into my local coin shop and asked to buy one Canadian Silver Maple. He handed me the maple, and I handed him cash. It was that easy.
(I still keep that very first silver coin in my purse – as a daily reminder of what real money is. Many people also like to keep a ‘pocket coin’ – whether it’s the first coin your purchase, or one that has special meaning to you).
I prefer to shop with cash, which is another reason I like to purchase from our local coin shop.
If you’re new to stacking silver, you may not have a lot of money to invest. Having the option to buy just one coin at a time takes away the feeling of overwhelm.
Even if you just picked up one coin a month, after 12 months, you’d own 12 ounces of silver. That makes you 12 ounces richer than you were before you started.
(For reference, a Roman soldier was paid the equivalent 1 troy ounce of silver for 10 days’ work. Your 12 ounces of silver, in real value (not the current, suppressed value) is the equivalent of 24 weeks’ pay).
Here in Canada, at the present time it costs about $40 to pick up one silver maple. (This, of course, varies with the current spot price of silver, plus the small premium you pay to the vendor).
$40 a month is a very affordable savings account.
Once you have your first coin, and feel the beautiful weight of real money in your hands, you’ll likely want to keep getting more.
2. Reputable Online Dealer
If you don’t have a local coin shop, or you prefer to shop online, my next recommendation would be a reputable online dealer.
I spent some time searching online forums to get an idea of what dealers came highly recommended. I also went to various dealers’ websites to see which ones had the lowest requirement for free shipping. You want to avoid paying shipping charges on your coins, because that effectively increases the cost of your coins when you buy them – a cost you won’t recoup if you need to sell them.
I chose to go with Silver Gold Bull.
Silver Gold Bull will ship to many countries across the world, including, but not limited to, Canada and the USA.
In Canada, most places you need to spend $500 or even $1000 to get free shipping. With Silver Gold Bull, you only need to spend $300 to get free shipping.
We have ordered from Silver Gold Bull many times. Service was EXCELLENT, our order arrived quickly, and everything was neatly and securely packed.
They will even use a different courier each time, so there is no suspicion about what might be in those small, heavy boxes.
Silver as a Preparedness Tool
Have you considered trading some of your fiat currency for silver? I feel it adds an extra layer to financial preparedness by helping to protect you against inflation, and offer an alternate form of currency in the case of a complete financial collapse. It makes a wonderful at-home savings account, and helps you maintain a little bit of independence from the government and the banking system.
Silver is also beautiful, has inherent value, and once you hold some in your hands I think you’ll feel a historic connection to this form of money.
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