What to do with gold/silver?‏

Ferfal,
This subject has come a couple of times and I was wondered how this was handled in Argentina.
You go to the grocery store to buy some things. When the cashier talleys the amount you hand her s couple of ounces of silver? Did/do stores keep track as to what the conversion is for precious metals - maybe a silver Maple Leaf or Golden American Eagle? Or maybe there are laws in place that force the stores to reject the precious metals or coinage?
Gary
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Hello Gary,
Thanks for your email and sorry for taking so long to reply.
Gold became an instant hit right after the economic collapse of 2001, the business of buying gold went up 500% the years after the collapse. All of a sudden every jewelry store and every kiosk, every new shop that opened was all about buying gold. With terrible rates of unemployment and inflation people became desperate, and the first thing they did after running out of money was turn to belongings they could sell. Of course, selling jewelry meant you could go to any of these stores and walk out with some cash to put food on the table.
Here its important to notice that in spite of its popularity, the real business was for the person buying the gold and melting it, rather than the desperate person selling at a big loss, often for a spot price that was well below market value. For those that had gold coins, the loss when selling was generally not as bad if they went to a reputable precious metal dealer or bank.
Answering your first question, no, you wouldn’t pay in a grocery store with any kind of precious metal. You could although go to one of the many dealers looking to buy precious metals, which could be found all over town, sell your precious metals for whatever the price was that moment, and then with the cash now go to the grocery store. People that had gold and silver coins would sell a little bit at a time so as to preserve it from inflation. Answering your second question, yes, knowing the ongoing price of precious metals and especially currencies was very important. For years and still today, for any Argentine catching the price of the US dollar that day before leaving to work is as much of a ritual as checking the weather forescast.
Regarding your last question, there’s many aspects to it. First, when things get really bad what the law says sometimes isnt taken that much into consideration. Expect a big black market to rise if regulations restricting the use of precious metals is imposed. Second, precious metals aren’t as much of a deal in Argentina as they are in USA. A restricting to precious metals in USA would be hugely controversial. Lots of Americans keep and understand precious metals very well. Any attempt to restrict the use of gold and silver would be met by an opposing effect. This would probably increase the value of precious metals.
In the past I have recommended having some “junk” gold for selling without attracting much attention. I still think its a good idea to have some as the precious metal equivalent of pocket change but only when paying spot metal price. Simple rings such as old wedding bands or broken jewelry, mostly simple chains and necklaces are good choices. As for the majority of your precious metals, stick to well recognized bullion coins.
One last tip, keep in mind that you can only go into the US or leave America without declaring the money you have if it is bellow 10.000 USd. This goes for precious metals as well.
FerFAL
Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.