In 1998-99 the coin business experienced a boom in precious metals sales. Spot prices of the metals were still abysmal at the time, but demand was outstripping supply for several months. Why? Y2K.
Old silver coins were among the most popular products during this time. People wanted small denominations that would be easy to trade in times of desperation. These coins were so popular that the price nearly doubled on them, not from increased spot prices but strictly demand. If societal monetary systems failed people wanted to have pieces to barter with that had real value.
People were preparing for catastrophe. We were transitioning into a new millennium and no one knew if the computers were going to be able to go forth without crashing. Being prepared for a society where credit cards, checks, and maybe even cash would be no good was common table talk. Most thought that is was silliness, but many prepped in case something did happen.
Time passed into the new millennium without widespread disaster, but those who had prepared had unwittingly (or wittingly) made a great investment. Although the computers did not crash, the next decade saw the largest slide of the dollar in history. Gold in ’98-99 spent most of its time valued at less than $300 and silver less than $6. By 2010 gold had topped $1,400 and silver was more than $18. Those who held onto their “prep” cash have made out handsomely in a time when many lost vast amounts in the stock market or real estate. And, if you look at how little the dollar buys today verses in 1999 it was an even better buy.
Fast forward to 2012 and today we are faced with a struggling economy and slipping dollar. A new television series has just debuted, “Doomsday Preppers,” and talk is once again centering on where we are headed and how to be prepared. Many have already stored up gold and silver during the last decade, but there are those who are now looking to prepare themselves.
If we do have an economic collapse gold and silver hold value on a world wide basis. Many are now realizing that a dollar can be devalued and does not carry as much permanence as precious metals. With our government printing more dollars there are those that believe the dollar’s collapse is immanent. Y2K proved to be a non-event, and many today feel that “preppers” are blowing things out of proportion.
The other day my pre-teen kids were arguing over how much money was in the world. My son went to the Internet to Google how much money was in the world. The answer: $46.5 trillion. I am sure the answer could be debated, but if you look at that number and then our national debt $14-$16 trillion, depending on your source, it sounds rather scary for the dollar’s future. Time will tell if today’s “preppers” are well founded in their fears or not, but ultimately having a portion of your assets in precious metals has never been a bad idea.
• Allen Rowe is the owner of Northern Nevada Coin in Carson City.