LP writes:
I live in an apartment. I have some silver and gold. I want to live on the land, and own my place. But I am not sure if I should buy land right now.
My question is: do you think I should wait for silver and gold to prior to purchasing land, or it does not matter as land will increase in value as wel?
I know as a fact that in 10 years I will be able to buy those cheap-looking suburban houses for a couple of Au oz.
But what about good quality land? What about land where you can hunt, get some woods, or grow things? Will they be worth MORE or LESS in gold or silver as they are right now?
And what about quality of life as well. I am trying to put that in the equation: every year is not coming back. So how do I put a price on those years wasting my time in an apartment instead of living on the land…
But still: if I buy now I put myself into debt and I must sell my silver and gold.
We decided to open this Q&A up to the collective wisdom of SD readers this Labor Day weekend. The Doc will chime in later in the weekend with his thoughts on the issue.
Time for SD readers thoughts and opinions: Will Land Be Worth More or Less in Terms of Gold or Silver After the Collapse?
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Having studied Property Evonomics it is extremely hard to generalize about the price of land as a whole across various markets. It will really depend on the location, soil, access to water, amenities and various other factors. In a situation where a currency is rapidly depreciating, it will be harder to gather relevant market evidence and your negotiation skills will play a bigger than usual part. I think there is a potential in an economic collapse scenario that people will be reluctant to sell land which has the potential to feed them. More info is needed to make an acurate assessment.
I believe that the time to buy gold and silver is now, the time to buy land will come later. When the 99% of folks who hold no precious metals, and thus no value and being thrown from their houses and land due to foreclosures, that’s when you will want to buy land. Fortunes are made when there’s blood in the streets.
There are two parts to your question @balz; land value and prepper value. A lot matters on how bad you think bad will get.
When the banks begin to fail that will eliminate any sort of bank financing. Without bank financing there will be fewer buyers. Fewer buyers means lower prices. If at the same time the value of gold is soaring, you will be able to buy more land with gold then than you can now. However, if you are in an urban area facing a rioting mob, your hoard of gold and silver won’t help you much. So waiting to buy might get dicey.
Question is how bad is bad going to get. If Greece was any indication of what we can expect it won’t be a Mad Max scenerio. Goods and services will still be available, you just will have have the peoples’ money to access them. And for over two thoasand years the people have always turned to gold and silver when the government issued currency turns worthless.
The problem with land is you never do truely own it outright. Because of property taxes one never has alloidial title. If you can’t pay the taxes the State takes your property. So if you have land make certain you have enough gold in reserve to pay the taxes.
UglyDo: You understand EXACTLY what’s the problem!
A systemic failure and I can buy land with stack and everything is allright.
A major systemic failure and I can’t do anything without been killed by the mob.
Logic says the second scenario is more dangerous.
But logic also says the second scenario is much much much less likely to occur.
What to do…
Can you rent in the countryside and keep your PM? Following your heart’s dream is the right path – but of course you want to be sensible about it. Now is not the time to sell.
I don’t want to move twice. I believe I will need solid relationships for when SHTF… and its expensive… and when you rent, the landlord can take whatever he rented much more easily.
Thanks to the Doc for asking my question (yes, it’s mine!).
First of all, sorry for the poor quality of my text. English is not my native language.
Basically, I was able to get a pretty decent view of what is to come except this one thing: will good land go up in value faster or slower than precious metals. I’m thinking really hard about this one and I can’t get a good answer.
I know the best scenario would be if I could find land and “buy” it (well, from the bank) without touching my modest PM stack. The problem is I can’t, right now. I would have to sell my PMs.
But I feel like time is running out because I look around me and I see land price going up in value. Five years ago I could have bought decent farm land not that far from where I live. Now, it’s impossible. Only big farms 500.000$+ everywhere and gentrification where smaller land is possible.
I am looking for anything over 20 acres, half wood half good land. 50 acres would be better. After half a century of industrial farming you don’t get this kind of land easily: more often, its 200-500 acres.
So….. food price will continue to go up, so I believe land price that produce food will continue to go up in value. On the other side, big industrial farms use a lot of oil so Peak Oil can bring trouble to them. They might live, they might fall. Maybe they will sell some quality land at some point.
The more I think about this, the more I don’t know what to do. I can’t really price the difference between having good food grown locally and having PMs to buy this food later.
Thanks for your help.
LP My concern would be what would happen to you, your family and neighbors if the SHTF. Right now we can see what happens when a natural disaster like a hurricane, flooding and tornados hit the south. Hurricane Isaac was relatively weak as hurricanes go but the rain it produced was the disaster component. Apartment dwellers are hit the hardest since you have a large number of people in a compact space. Getting out of this confined area is always a good idea. Apartments lose power, sewer systems and water as systems sut down. Getting out at that late date is difficult as food stores, gas stations and other businesses are often shut down and empty. Find a place to set up house is difficult once things begin to unravel.
In the worst case with civil strive, bank shut downs, rationing, martial law (local or regional) and troops on the street directing traffic, the prior duscussions of whether to buy land and set up your homestead there become moot. But actually doing this, getting out of Dodge and securing a safe place can’t be done rapid fire. The planning needs to be put in place steadily and with thought to making sure you have what you need to survive. It can be expensive too but you are already paying rent so that cost savings can be foctored into your affordability questions.
Buying some land, 1-2 acres, must be thought of as to location, access, safety, arability and water if farming is your plan, or a means to set up camp and secure your position for several days or weeks. A 1 acre parcel farmed for fruits and vegetables as some animals like goats, chickens, rabbits and geese can support a sizeable family. Access to well water is vital.
If you work, then commuting to your job needs to be considered. If you own a business is it portable? If you want a complete lifestyle change including a job or business that must be factored into the equation.
Millions of people live in the country and have very convenient and comfortable lives. They are self reliant and have spirit of connectedness that allows them to have a support system within their community.
There is a wealth of free information on the web about setting up a country life. I like prepperwebsite.com as a good starting point. Don’t get lost in the rabbit hole. Start out by writing down the basics of your needs as a apartment dweller, examine the lacks of that system included the basic lifestyle requirements. What can go wrong with that lifestyle and how you do remedy those qualities that are missing. Your course of study can grow from there.
Don’t sell your precious metal assets until they have ramped in price enough for you to comfortably liquidate some to buy your land. Finance the land with a seller note. Those usually have low interest rates. Hopefully the land has a small home already built on the land. Otherwise you will be ‘camping’. Once the land is in your name you can continue your plans. It is possible to do what you want to accomplish without a massive outlay of capital but you need to proceed systematically.
Thanks for your insight.
So, you would recommand buying right now 1-2 acres of land cheaply… and maybe moving again later if I find something else better?
I don’t know where you live, but here its winter 5 months each year… 1-2 acres wouldn’t be enough for animals, because I’d need at least that land only for hay in summer… But you are right that we can do a lot with 1-2 acres…
The thing is : moving is expensive. I’d like to move once and for all, the create relations with the new community and preparing for when SHTF as people will trust me… if SHTF in 4-5 years I won’t be a newcomer anymore…
Buying land, number 1 must first makes sense financially. It has to be more than a good deal. It must be the right deal. I would only purchase land if it was exactly what I wanted and it fit my lifestyle at that time. Just because you find a good deal doesn’t mean it is a good deal for you. Personally, I would hold my PM because a major move in PM prices could enable you to buy the land you want without spending 5% of your PM wealth. Right now the strongest position you have is with PM. I would hold off until March or April of next year. Number 2 You can’t invest in one commodity at the expense of liquidating the other. The right purchase leaves you holding land and the lion’s portion of your PM. Number 3 You can’t buy on an impulse because that can be misleading and sometimes it indicates the element of fear in your decision making.
snowrider: thanks
But what about if PMs don’t go up that fast… I mean: I think we can reasonably say that silver might be 60$ next year… Still, that’s not enough to buy land without touching the stack… and still, it might get to 120 than 240 the next years… seems risky…
But the same can be said about waiting… If it collapses, it collapses, and I am trapped in the city!
Difficult choice!
At the height of the Great Depression real-estate in New York sold for pennies on the dollar. One building sold for the cost of it’s elevators. I agree with BSS about renting in the country if you’re not sure about rural living, but if the SHTF, you won’t want to be in an urban environ. Living in the country with my stack really near by gives me great comfort. We have water, grow fruit and veggies, and will soon be raising chickens. Vacation homes are pretty cheap right now, as many scale back to keep their primary residence. My advice is find a place you like near like minded people and ride the storm out there.
Regards.
Themagicbusguy: The Great Depression crisis was a crisis of overproduction. There was too much food available, hence the price went down. Now, there won’t be enough food for everyone. This is why I see the opposite.
If you are envisioning a complete collapse and hyperinflation then this has already been answered. Just read the book by Adam Fergusson: When Money Dies, The Nightmare Of The Weimar Hyper-Inflation.
However, I believe we’ll see 1970′s type of high inflation, maybe currency revaluation, versus hyperinflation. Either way precious metals will only go up and up.
Yes, but so will do land. The question is: which one will go up faster.
The book answers all of these questions.. Food didn’t stop growing during the Weimar Republic and tourists still visited Germany as it was a cheap vacation. In short, food was available just it was expensive in local currency and jobs were in short supply, so people couldn’t get a job to pay for the food. A potato at the beginning of the hyperinflation was worth the exact same as a potato at the end of the hyperinflation when you adjusted for the hyperinflation.
So if you are wanting to weather the storm and survive off the land without paying large premiums for food then get land. However, precious metals will buy a lot of land if a currency collapse happened just like the Weimar Republic.
While I don’t have the exact statistics it appeared that food and gold went up in parallel. However, land will trail the price since it’s not an immediate asset which you can eat today. Everything became about day-to-day type of survival versus pasture land that would not produce crops for another 6 months.
Also, a lot of crops and farms got plundered during this period by the locals who were starving. So farms were risky especially if they were close to cities.
Just to make sure of the point: Gold will go up in price faster than pasture land.
Once again, I don’t believe we going to have any currency collapse but a dose of 1970′s type of high inflation.
Thanks… I don’t believe we will get hyperinflation myself… I believe in what Armstrong’s says : you can’t really have hyperinflation in the core economy. I think it will be a big reset with runaway inflation and then the reset… Well, whatever I believe, it could be hyperinflation and I could be wrong…
I agree with what you say…
So in the end, even if gold go up faster than land, would you wait a couple of years buying land as a protection or doing it ASAP?
I mean: yes gold could go up faster… and I could be richer… but maybe land could keep me alive… poorer, but alive!
After the collapse the question in my mind is who will have control? Values of any hard assets can change overnight. When the collapse
occurs there will be riots of simple and aggresive people in our 300 million plus population. On an intermediate basis simply food, water
and shelter of owned land will become hard assets in immediate terms. Masses who have not prepared will want to take what you have. People cannot digest Gold or Silver in any diet, so at that time, the land that people own will be at lesser risk. You don’t own your apartment. Owned land will be more defensible for the prepared. Depending on the “White Hats” in our government will be the answer to the future value of anything. It is clear that the Obama Administration wants to make America dependent on government for survival. It won’t work as our military “White Hats” will sooner attack Washington than our population. The Department of Homeland Security has stocked up on millions of rounds of ammunition as well as The Social Security Administration has stocked up on “Hollow Point” handgun ammunition. Those deparments are controlled by the Oligarchy governing body now in power. The Pentagon is not. The problem will go ballistically International. Yes, Gold, Silver and Land values will go to very high levels. Many millions of our population will lose their land after debt issues are noted and sorted out by whatever administration causes a new monetary system to unfold. Communications of the value of anything will not be known until this happens. My opinion is to own physical Gold, Silver and land outright and defend basic necesscities of survival needs. If a person has a relative or friend who owns land and you cannot afford both the ownership of Gold and Silver, move there and also keep only enough money in your bank to pay for monthly bills. Remove savings (cash) and place in a safe place. Money in banks will evaporate overnight.
Below are links to the inevitable. Over 500 indictment warrants have been issued.
http://divinecosmos.com/start-here/davids-blog/1066-great-revealing
http://www.dailypaul.com/245545/the-great-revealing-us-marshals-expose-biggest-scandal-in-history
Ranger from Texas
LP, I’m new and signed up just to comment. I live in cold Canada and have this exact same question so here’s what I’m doing and why.
1. I bought as much phyzz as I could over the last 5 years (when someone told the silver story). I do dollar cost average but instead of every month, I use a loan and buy in July or August and pay off the loan over the 12 next months. That way, I get the best price and I don’t mind paying a bit of interest because silver goes up way more than the total of my interest payments.
2. Get land now for several reasons. The gubberment and local counties are slowly making it impossible to do anything on your own land. Want to build a home yourself? Nope. My county won’t even issue a building permit to anyone but a certified builder. Want to cut your own lumber on a sawmill? Not here. Can’t build with ungraded lumber and getting my own lumber graded costs just as much as buying it. Chickens for eggs? No can do due to the zoning laws and public safety (chicken poop MAY contain bird flu). Even installing a septic requires permits and lots of inspections. Have you thought of using ICF blocks? You know, the kind that go together as easy lego? Well, ICF is structural and so you need to have a licensed contractor install them so no DIY allowed here. I’m pretty shocked at how much crap you have to go through to get everything set up to be self sufficient and I live in a province that is 80% covered in trees!! Pretty rural, in other words. There’s more: good land will go up right along with silver but building on that land will get more and more difficult going forward. The goal here is to get you to give up and move to the city and depend on city water, public transportation and big grocery stores. You are much easier to control that way. Other reasons for getting land now are that you need to cultivate the land to grow your own food and that means you have to already have the land. If you wait until the SHTF and then buy land, you may miss one entire growing season and then what do you do if there is martial law and you need a RFID chip to buy food?
Just my 2 cents but I’ve been looking for land and want to build my home myself to save money, make sure it is built right, add some “off budget” secret rooms and get a garden growing before food eats up more and more of my paycheck so I can never save enough for a down payment even.
HTH
I live in Canada as well and I agree with everything you said.
I’m looking for an old house that I could give a second life… I think new houses are expensive… unless you know how to build them… which is not my case.. yet.
If you live in Canada you must understand how it is : there is land, but if we want to farm, Nunavut is not the place to go!
Hi balz,
Great to see another Canadian here. I live in Atlantic Canada but we can grow most stuff here. No peaches, though. I reread your question and I believe you want to know if buying land now is better or waiting until silver hits $500 an ounce or more and then getting a bargain. That’s a tough call. If the crash comes overnight like due to a bank failure somewhere and you’re in an apartment, where would you go? Remember that firewood has to be air dried for a year before you can use it. Ultimately, you will be able to buy a Porsche, a great farm and everything you can think of with silver but only after the dollar has been trashed and it is worthless. Before that day and in the meantime, you will have to live in a place that is not as safe as out in the country but it will cost you more than waiting for the day when silver reins supreme. I want to get a mortgage on the land I buy and lock in the low interest rate now while I still have some $ left over to keep stacking. That’s my strategy.
Cheers, Rob
It looks like a nice strategy rbrauns! I wish I could do the same !
Balz My apologies for assuming you lived in the US My entire answer set was tailored to both the systems set up to handle a US domestic problem–both natural disaster level as well as unnatural. Unnatural goes way beyond the scope of this post but elements of both situations do flow to the same conclusions. The US does have very cheap land relatively near urban and suburban areas. Gas prices and availability notwithstanding, we can buy good agricultural land within 50 miles of our home in northern Nevada. The US is one of the most unpopulated countries in the world relative to its 3,000,000 square mile size. Thats only 100 people per square mile.
If the balloon goes up I think it will hit us really hard since we are not ready for it. Europe is also going through some really hard times and except for the Greeks and Spainards, the Eurozone is still pretty clueless as to what could happen. 90% plus of our population is clustered in urban and suburban areas. I would not want to be there if troubles came up.
If it was me in a country where land was costly and availability scarce I would connect with like minded people, steathily, and see what they are contemplating. Preppers are preppers whether they live in the US, Brazil or Australia. If you let me know your home country I may be able to do better on my response.
Maybe getting involved in an agricultural land buying cooperative would allow you to get some affordable land, 1-2 acres in conjunction with a larger acreage that was co owned by a number of people. That 1-2 acres could be your homestead with extra co-owned land producing the animals and feed you need. You share your crops that are particular to your skills and land use with those who have other crops or animals as part of the coop.
Now to the question of what happens to land and property values in extreme situations. The question is how someone can buy raw land or housing land–they are two different things. Raw land is valued for its productivity Housing land is valued more by its economic rent, the price barriers to the rents and the cost of money to buy that property If the cost of money, the interest you would pay for a loan, is extremely high such as was the case in the US in the early 1980′s and the hyperinflationary cost of money in other countries which experienced currency failure, the price of rentable housing property could drop by 90% because of the complete unaffordability of those housing units. If the economy is doing badly and people are growing poorer by the moment due to extreme or hyperinflation, they can’t afford the high rates of money rental or property rental. If a property once went for $500,000 can only be bought economically for $75,000 since that is all the property price would support in a loan and rents to pay the overhead of the property ownership, then no one will buy that property for more than $75,000. Investors are not crazy. Buyers who are users would not be able to afford the property either
Apartments, commercial properties, single family homes and retail rentals will collapse in value. We have seen that in the US in the last 5 years despite the favorable interest rate market. It’s a great time to buy but most people can’t qualify for these low rate loans or have the money for the down payment.
Our huge drop in property prices was due largely to the fact that people’s incomes dropped like rocks, rates ramped up after the teaser rates of the subprime loans went to 6% from 1%. People were qualifying for $600,000 with these LIAR loans and teaser rates. The buyers were completely unqualified and yet the lenders made the loans without concern to the credit quality of the buyers. Once the loan payments started in earnest the buyers wre unable to make the payments, went broke, defaulted and lost their homes. Prices in some of the really high priced areas like California, Florida and Nevada dropped by 60-75%.
At that point in time the property prices reverted to affordable levels. The original buyers were probably not about to afford anything even 25% of the price they accepted in their purchase but qualified buyers were able to step up to the prices once they dropped by 70%
Imagine what happens when interest rates go to 6, 8, 10 or even 12%, ramping upwards to levels completely unaffordable for the average person. Then property prices would drop to a level that someone could afford at 10% interest rate. Doc sent me a really good post a few months ago that outlined what happened in several countries when the lending, property prices and inflation went badly against the economy. Property prices dropped by 80-90%. I am of the opinion that we are due for some hyperinflationary scenarios if TSHTF since money prices now are artificially low. Economic problems, particularly those problems caused by extreme currency printing, banking leverage and reductions in income, profits and tax revenues are all a monetary problem. This scenario is the one which could knock the wheels off the global economy, hitting everyone everywhere. So the problem will be hyperinflation boosting the price of precious metals while depressing the value of real estate, productive land excepted.
Land was something that held its value due to the productivity of that assets during good times and bad. Just as unaffordable rental prices of money and property could depress the value of residental and commercial property it could make the price of land go up since the price of the commodities produced on the land would go up against the relative inflation rates, drawing up the price of the land due to its economically productive rents. In Weimar German gold went up so high that a single ounce of gold could buy a nice apartment building or hotel. Vast fortunes were made when those with the foresight to buy with PMs in the era of hyperinflation of currency and hyperdeflation of commercial property saw the inevitable reversal of these deflated property prices once the currency wars ended. You might find you can have your cake and eat it to if you buy land with low interest rates, stay the course and pay off the loan with PMs when their prices ramp upwards. Once the whirlwind subsides you could sell your land, buy precious metals when their prices drop after the crisis since it won’t last forever, and figure out your future plans from there All assets have booms and all assets have busts. You need to figure out the direction of each class and invest accordingly. That might explain why I own nothing but PMs and live in the country.
Hi AGXIIK,
No offense taken, I should have said where I live. I live in Canada. As you said, in the US there is lot of cheap land, but in Canada that may seem like a paradox, as we are only 33 M in such a big country, but cheap land is rare in the eastern part where I live. One has to remember that its only in the southern parts of Canada that one can build a farm. Go 300-400 km. north and its -40 to -45 celcius in winter!
In Canada, the real estate bubble did not burst yet. One of my friend paid 220,000$ for a small suburban house on a 3000 ft land. This is crazy.
As for land, its going up very fast, at least around the city where I live. The problem is: I can’t really go out in the woods… I need to continue working in the city as a transition. So 200 km. from where I live is the absolut limit, and here there are only two types of land-related houses :
Type A ) Mega farm 500,000$+ with 250 acres+
Type B) Gentrificated chalets 150,000$+ with like 3-5 acres, mostly wood and rocks.
So far my strategy was to accumulate silver. I first bought silver in 2005… and did the mistake of selling it for a 100% profit 2 years later… Now I would be looking at 400% profit and more.
So right now I could sell silver again and buy quality land (well, if I find one… but its expensive)… or keep silver and wait in apartment for silver to go up in value.
The real trick is that I wonder what kind of land 150$ silver will let me buy… and I also believe silver willl go up to 500$ in today’s purchasing power.
So I’m looking every day for an option… so far nothing.
I saw a nice land with 100 acres and a house on it for like 125K$… it was like a 4 hours drive from here and it was in the cold… That wasn’t good.
Thanks
Land isn’t going up in price any time soon as far as I can tell yet metals will. Perhaps your metal will even continue upward as the properties are heading further downward. All that said, even if property goes up during your wait, the metals will far outpace in value. That’s this cowboy’s opinion. What is far more relevant though is when is the collapse going to really begin because I would rather see less of a profit and be ready, than to be raking in more money on metals and not be ready. I made the move four years ago for that very reason. I can hunt, burn wood to stay warm and basically survive come hell or high water but I can’t say that for city dwellers or any heavily populated area.
Recently my brother in-laws neighbor, which lines with his farm sold for over 11,000./Acre. And what is driving it up so high? 18 dollar beans and 8 dollar corn. Farmers who have farmed for years are cashing in on increased yields. Though the drought is definitely affecting them this year, I heard none of the farmers crying the last few years, I did hear many say they never made so much in one year. So like everyone else in the human life, greed steps in and more is the answer. I believe land is in a bubble, do to these circumstances. Yet it has not run its full course, with the coming inflation crisis, I once new an elderly couple who before the depression saw it coming, waited with their good dollars back then, and bought a 40 acre farm for 10,000 dollars. I believe land will fall from its bubble, but not like housing, and other assets. The federal reserve big boys are buying land now, maybe they get their money from the TBTF funds, and who cares what you pay. They now have the deed! I hope to one day buy a small farm. But I’ve hedged my bets on PM, and then on buying the farm. (I needed to be careful, with that saying of buying the farm. I want to be their to enjoy it! ha ha.) I would be patient. Who knows? Do what you think is best and hope you’re right. I’ve been wrong before and may be wrong here. Only time will tell.
I believe in Peak Oil. That’s why I started to prep in 2002… but I was lazy, and I finally forgot about it… Believing in Peak Oil means I think 18 dollar beans and 8 dollar corn is not a bubble, but the new normal. I believe we are going to see much much much higher food prices as oil will get up as welll… This is why I don’t see land going down in price.
If History is any guide, Land is what made people rich. We are going back there, but considering how depressed are silver and gold prices, I see this as a competition.
I see this as a win-win scenario Land or silver/gold with a big “IF”, that is unless there is a total collapse. Then, I’d look like a fool with gold or silver in the middle of chaos.
Balz I was born in Canada but left in 1964 so I have not kept up with the dynamics of the Canadian real estate market. West coast Canada is probably a bit different but reading about the troubles of getting land to a usable state as outlined by Rbrauns seems to present an insurmountable problem. The US and Canada have way to many bureaucratic nanny state pecksniffs trying to make life difficult for the more independent minded of us. The idea of a co-op of like minded people seems to be a better idea. Safety and force in numbers might help. I don’t see Canada devolving like the US since your taxes, government budget and deficits (or surpluses) are more manageable. Interest rates are low and maybe that special property could be had with a few people going in on the deal. We were planning to do that in Nevada and are still looking into that plan but need to find the right combination of price, size, water and proximity. I wish you the best and think that raw ag land would be a good investment. One thing about cold country is that most people will shun it since they have no means to stay warm But growing seasons are short. Our area has winter 6 months out of the year since we are in the Sierras That makes planning a bit more complex
I see winter as a huge advantage and that might look crazy from the outside. But winters forces community. You just can’t let someone die in winter. This is why I believe norther countries live better than southern. When its hot, you can tolerate your own pain much longer than when its cold. When its freezing, you have to work really hard to find a spot for winter.
I think you are right that Canada is in a better shape than the US, but IMO Canada is just part of the empire as well and with 90% of our economy linked to the US, we’ll going down as well…
We know that precious metals prices are suppressed to 20% or less of their true fiat value, or at least silver is. In contrast, I would guess that other tangible assets are not suppressed, and prices have risen in conjunction with the worldwide bank run in which depositors are withdrawing their money and investing in tangible assets. Therefore, we have seen arable land, collectibles, art, antiques, etc. rising in price. The other day, I saw a 1956 Porsche Speedster for sale for $325,000. Now that is ridiculous, and I am a fan of the marque. That is more a comment on the worthlessness of the currency than the inherent value of the Speedster. The panic to tangible assets is a lot further along than some might think. You would think that a land purchase could be wiser if made after the PM’s have risen closer to their true value in fiat.
But what about land ? Isn’t land prices depressed as well? Back in the old days, having land was what made someone living well or not. With cheap oil, we produced so much food on so little land that land price went down… But it’s all coming back; shouldn’t land price go up as well to its real post-Peak Oil price?
I’d like to read SRSrocco on this
The question seems to mixed together a couple elements:
1) Suburban properties
2) Self sufficient Backwoods
For self-sufficient backwoods, you might be able to try buying direct from government, but I think you need valid reason and pay “fair value”
Also, the question seems to be framed for a hyperinflation scenario. In that case, a mortgage wouldn’t be a major issue as inflation is good for debt, but hyperinflation would wipe out any debts even faster.
Consider that many people (and whales) will be thinking the same thing and will be waiting to pull the trigger. So, if you have the resources to buy now-ish, by the end of your 10 year timeline you would already have begun extracting the value of the land, by building it up, rather than hoping to buy that dream property by the end of the timeline and start building when supplies would be more difficult to source (and you will be older and not be able to do as much).
In theory at least.
With suburban homes, my guess is that if things truly get bad so bad that you can buy it for 2 AU oz then suburbia will probably crumble as essential services are shut down and people move out. Look at Detroit as an example to extrapolate from.
Someone up there mentioned Adam Fergusson`s book, When Money Dies. It is a good read, situation will not always exactly be the same though.
Maxim: If You Can’t Buy It Outright, Don’t Buy It. When you DO buy land, try to find a lot that last traded before 1964 (meaning it was bought with silver) and execute a witnessed private, Common Law Deed of Sale under the State’s original, ordinary jurisdiction, stipulating that Title in both Law and Equity is thereby Granted to you for an agreed upon quantity and quality of precious metal … NOT ‘DOLLARS’ in ANY way, shape or form! Also, don’t use ANY ZIP codes or federal-jurisdiction state abbreviations. The object being to forgo all conceivable jurisdictional traverse that a court can point to as a ‘benefit’ or ‘protection’. This circumvents all government nexus used to impose on you in regard to your land, up to and including Immune Condemnation and Taking.
I’m thoroughly positive that the world’s monetary system is about to collapse because of the way it’s constructed. That being the case, once it occurs, production will collapse and every sort of connected business will suffer severe loss of revenues (however that will then be defined), causing huge asset depreciation in the midst of endemic unemployment. In the aftermath everything will be as cheap as it can possibly be made to revive commerce. That includes land. This period will likely last for about nine months, so that will be your window of opportunity to act on things you’d researched beforehand.
Perfect analysis Pat!
Which Bank will be left to handle the sale? Which Currency will be left? BRICS probably. Be kinda hard to know we need foreign gold backed currency here in the good ol’ U.S.A. ne Ame-Rica….banana republic…Also: What if there is an Iceland style Debt Forgiveness? Maybe buy now and get it fer free! Or how about: What if all the Titles and Deeds are hypothecated and re-hypothecated and Nobody has a clear title? And what about if the entire Web goes down even for a moment and nobody trusts that the Data has not been tampered with? Potato Crop is looking good here…ahem…kaff kaff
Tough question! Many farmers hedge themselves with gold and silver. That’s why MF Global hurt so many farmers! There are many landowners who are not farmers that are all into the paper world. They will be selling some of their land to buy farm equipment and other needful things. I think it will be a buyers market. Millions may just expire or go to the FEMA Camps and that would certainly lead to a glut of land that was just abandoned. Glut of land and a shortage of metals should result in lower prices for land purchased with PMs but, way higher prices if purchased in hyper inflated fiat. That’s been my survival plan! Hope my thinking is right. To the risk takers go the rewards. But Don’t Sell Your Silver to buy your land!!! Leverage it and skip the taxes and then pay off the loans with your produce! You can also find a local down and out farmer and partner up by financing them! You will have good farmland land and an experienced farmer with equipment, that could be BIG!
There is also the option of making a Mineral claim. There are miles of prospective Silver bearing mountains in Idaho and the 1872 Mining laws have not changed since…well…1872 because it would affect Mr. Peabdy’s coal mine ‘ya know! Many of us that like our shiny metals should be ashamed that we have not grabbed a pick and shovel and got out there. Then there is all the Science that goes in to refining the ore. If you don’t mind not having the convenience of a 7-11 on every corner and the rush rush of freeway driving you may like a claim next to a mountain stream. I know where many spots are here in the “Gem State.” But to answer the Question, Gold has never lost it’s Value. Land on the other hand can be got for $200 an acre in Montana and many places. Water becomes the Gold then!
Mineral Claim? The problem is the mill sites. They no longer exist for the average citizen to dig up a bunch of silver or gold ore and have it processed. Only the big guys have their own mill sites and there’s no way you will have access to them.
And there’s no way the average citizen is going to get the O.K. to setup a mill site without years of paper work and big, big bonds and insurance policies.
If you wanted to mine silver you’d better start looking at Mexico or Latin America.
Last depression a lot of farmers went bust.
In terms of land appreciation vs metals? It depends on why you are buying metal.
If the old currency dies and a new metal backed one is introduced a la Lindsey Williams, you can expect land will be cheaper afterwards.
A true hyperinflation, land will be valuable for a while, until the taxes destroy you and roving marauders loot your fields.
If I had my choice between $500k in farmland or $500k in gold, I would go gold.
That land can be taken pretty quickly, gold they have to come get you. And that might be a problem if you quickly exit to another country.
Its all about counter-party risk. Gold has none, its potable, its accepted globally and seen as sound money.
Land can be confiscated, it ties you to one country, its not liquid, it has counter party risk, it is an anchor.
Besides, land in Canada and the US is usually stripped on minerals from factory farming.
The hot farming land is in South America, and is significantly cheaper.
I think with war looming, too many unknowns, creepy governments stealing land, you are better off in something you can run with.
This is a fascinating question and one with which I have been wrestling for some time now. Having a few acres of land would be HUGELY better than having no land at all and merely MUCH better than having a lot in town.
My thought is that both owning land before the SHTF and buying it afterwards with much more expensive gold and silver have their pluses and minuses. IMHO, the pluses for buying land sooner outweigh the pluses of buying it later. Getting settled takes time. Learning to garden and care for animals also takes time. Time is also a valuable commodity, so buying later is a form of wasting it, even though the economics may favor buying later. Buying now on a mortgage is a truly splendid idea. It gets us onto the property ASAP where we can start getting the place into the shape that we think necessary BEFORE all Hell breaks loose. If we still have our silver and gold, we can always use some of it to pay the place off later. If the financial system collapses completely, then there won’t be any need to pay it off later because the lending company could well be out of business and non-existent then.
As to animals and space, think small… chickens, rabbits, and fish do not require much room, yet can provide considerable food value. A 1-acre garden can supply a great deal of food, if planned carefully. As to fuel, few things beat a couple of acres of poplar trees. 3-4 acres with a small creek for a water supply would be quite good as a survival abode. Don’t forget the combined root cellar / emergency shelter.
This is my plan. The only problem is that here in Canada they banned the 40 years mortgage in 2009, the 35 years mortgage in 2010 or 2011, and they just banned the 30 years mortgage… Well, we just can’t borrow for something inexpensive… and we can’t find anything yet…
Otherwise, I agree with you: if I can keep my silver, I might use it to pay mortgage later and that would be a win-win scenario…
But I fear buying less than 5 acres because that mean I would have to move again later. I studied that in my area it takes at least 20 years for wood to grow into fuel, and that I would need at least 6-7 acres of wood only to heat the house (minus 30 celcius happens frequently and winter is pretty long). So if I buy something less than that, I’d need to move again… which is time consuming, and expensive.
This is why I thought about selling some PMs to do the trick.
Thanks for considering this question as fascinating. I’m much into all this and this is the only question I didn’t find any conclusive answer on the net.
As a Mormon, there is a prophecy from the late 1800s that says an acre of land will be worth an ounce of silver after the collapse. I’m sticking with that.
Where can I read about this prophecy? Thanks
@Balz…
“I studied that in my area it takes at least 20 years for wood to grow into fuel, and that I would need at least 6-7 acres of wood only to heat the house (minus 30 celcius happens frequently and winter is pretty long).”
That will complicate things for you, of course. I live in a much more temperate climate where it rarely gets below freezing and if it does, rarely for more than a day or two. Here, poplar trees thrive, grow very quickly, and continue to grow from the stump when cut, so a new tree is not needed to replace one that is cut. Two acres of these can be cut about 20% per year, so the whole thing gets cut once every 5 years. That is plenty of time to regrow the wood that was burned. A cold climate with long winters is not especially conducive to SHTF survival, IMHO. Have you considered moving? I realize that may not be a valid option for some but it sure could make your life easier in the future if you don’t have to deal with long brutally cold winters.
“I’m much into all this and this is the only question I didn’t find any conclusive answer on the net.”
You probably won’t find a conclusive answer to this on the net because there are just too many personal preferences involved. What may be acceptable to you might not be to me and vice versa.
Most paper assets are going to burn as we cross the chasm to the next financial system. In general, hard assets will hold value and make it across to the other side. Different hard assets will do better or worse. For example, automobiles will be worth much less if the fuel is not available or excessively expensive. That is really what this discussion is about. Which hard asset, land or precious metals will do better getting across the chasm?
I suggest a different perspective. Land is not very liquid unless it is being sold at a deep discount. Conversely, the precious metals are the most liquid of hard assets. The markets for precious metals operate 24 hours a day. My suggestion would be to cherish that liquidity very carefully. At any time, you can trade the precious metals for whatever it is of comparable value that you want. You can not go the opposite direction very easily.
The real estate bubble in Canada is just starting to pop. It will take some number of years to deflate. There is no hurry to get land now other than if you need time to prepare it for what is coming. But even in a SHTF scenario, you could get much more land for your money by moving further away from the urban areas. My gut instinct is to wait to make the transition.
hunkered_down: Thanks… The thing is: I do believe the real estate bubble is starting to deflate in Canada, but I don’t believe it will affect farmland… Of course small suburban houses with 3000 ft of land will be in deep trouble, but good land will continue to go up in value. That’s why I’m eager to jump in.
I agree that liquidity could be an issue but it might be more important to have a place where we can grow enough food to get through whatever SHTF situation comes our way. If things get bad enough, food could become extremely valuable… and difficult to come by at any price. I know that if I had just enough food to get by I would not be interested in selling it.
Speaking of which… I planted a garden this year for the 1st time in quite a few years. I was surprised by how easy it was and how satisfying it was to create a decent garden in a fairly small space. It is only about 16 x 24 feet but was very productive. We have tomatoes, peppers, squash, green beans, corn, cukes, onions, potatoes, and musk melons. The musk melons got off to a late start so won’t mature before the frost comes, usually at the end of Sept / start of Oct., but everything else did real well. The Yukon Gold potatoes are absolutely delicious! We got about 7-8 of them per hill and they average about 3×4 inches in size. Did not plant any beets but will do so when we expand the space available. Good stuff! :-)
Mornin : )
Wow, wide open question LP. A lot of good responses and well considered evaluation of how events may unfold. Gold and silver and to a lesser degree the other PM’s will reflect true value again after the long term suppression is lifted, this will be reflected in the value of most everything else however the lifting of the supression of the PM price is a different event to the colapse of fiat but not so separate as the rush to PM’s as an alternative to fiat as money. In my mind these 2 events will catapult silver value to a level not seen for hundreds of years.
In the collapse of the crrent money system trade will ensue, life sustaining items from a glass of water to the land which will provide the food and shelter you’ll need will to survive will be the “luxuries” be “expensive” whether traded for labour or other items of basic need or PM’s.
The “price” structure will be relevent to the availability of the items in your area and the area will be as large as the items can be carried or moved within “x” number of days or hours of the value of the travel, be it fueled by vehicle (i doubt it), horse and cart or carried. For example – in the city maybe lots of PM’s and guns (jewelery etc) but no food and water so the value will be in immediate life sustenance items however in the country, say a beef/dairy area food and water may well be abundant but firearms or medical may be priced highly.
Where you look for the land you want may be priced differently now compaired to how it is priced post-collapse.
Objective assessment of the the community you want to live in and the availability of live sustaining items in that area and then what you can take to the community as an asset or wanted item after TSHTF will be the “glasses” you need to look through when assessing where to go.
What country you live in will have bearing, climate etc. What infrastructure you’ll need to provide on the property and how many are you directly responsible for, you and your wife is easier to look after than you, your wife, your kids and their extended family, in my mind the more you’re looking after the farther from any centralised larger community you want to be.
Predicting what the fiat will be worth verses PM’s and what the inflation and interest rates will be like all come into play if you’re going to borrow now and I’d be interested to hear what you other guys believe this will look like.
I’ve borrowed to purchase land in an area that exports beef, dairy, stone fruit and apples, oranges, melons and pumpkins, wine, potatos and it has a thriving cottage industry with local farmers markets. I’m glad I did, for the experience and intergrating into the community.
I joined the local bushfire brigade 3 years ago and am now a crew leader and though not completely accepted, I find myself working with a few of the locals closely, we (my wife and I) have a one man transport business (14 ton rigid truck with a rear mounted crane) and have carted split fencing for a couple of the local contractors and have taken scrap machinery to the local scrap yard on a percentage basis for some of the local farmers.
The 3 years we’ve been here for I look at as collateral or “community savings” – trust, which in the community we’ve moved to would be hard won in a setting of mass unemployment and economic devistation post TSHTF, these guys are generational farmers where the world stays the same. Having “new comers” trying to fit in during a massive upheaval would not go well (in my mind) during a time like this.
For the cost if you can manage to get land now and also have say 1000 oz of silver – if you have to borrow then for the reasons above – integration to the community, experience of producing and consuming local and own produce, acclimatising and familiarising to weather, seasons, roads and topography, becoming trusted or integral to some local group.
In my mind the interest you would pay verses the experience and asset you would build far outways not doing it but as I say again – only in my mind.
There are many other considerations and you are your own dog and you along truely know what you are capable of and how you can push yourself.
4 years ago I knew nothing about butchering or killing for meat, I’ve invented some cuts that I reckon haven’t seen a butchers shop. The first beast slaughtered was the most confronting and the first mountful was a little hard to swallow but now I know that with a gun and a knife, me and those with me won’t starve.
All this has taken time, if you expect to wait till the SHTF and then just lob somewhere and start surviving then you are a little nieve to what is truely required or already doing basic home produce and hunting/camping weekends on a small scale.
Good luck and keep adding to the stack – of PM’s, guns, provisions and knowledge.
Thanks clambake
That would be my number 1 scenario if I could keep the stack and find some land to develop those skills.
I too want to learn how all those skills and deal with a community.
It’s just… difficult having to wait, wait, wait, having this stack doing nothing while I live in an apartment far from the land…
I would add that there are many books that list the wild edible plants specific to the area one lives in.
” Having “new comers” trying to fit in during a massive upheaval would not go well (in my mind) during a time like this.”
I agree. Many of my relatives are farmers and they are pretty conservative about most things. They understand that respect is not given, it is earned, and that takes time. To those born to the land, new-comers who were not born on their land will always be new-comers, although they will fit in and be accepted once they have proved to be “good people”. That’s one of the highest complements they give, so if any of them refer to you as “good people”, you’ll know that you have done the right things. Helping others in need of your help will go a long ways in this, as farm communities are all about sharing. That’s how they celebrate the good times and make it through the not so good times.
THE COLLAPSE WILL OCCUR IN TWO STAGES
Balz…. it looks like you have received a great deal of good responses and advice. Most of the information from the members I agree with, but there a few things I would add. I am only going to touch on them because I plan on putting a blog post explaining it in detail.
The United States will suffer from two different collapses.
1) the more immediate financial and commercial collapse along with devaluation and or hyperinflation
2) then the ongoing disintegration of the suburban economy… due to peak energy, falling net oil exports and a declining EROI.
As several of the members have stated, housing prices and land will drop significantly during this devaluation-hyperinflation. Food, goods, commodities and many services will inflate to extremely high levels. Chain resturants and big box retail will start to close the least profitable and lower revenue stores for starters. This will increase in scale and will spread to the warehouse, business and supply chain system as we enter into the second collapse.
People don’t realize just how much leverage there is in COMMERCIAL & RESIDENTIAL REAL ESTATE. Back in the 1920′s-1930′s when we had hyperinflation (germany) and depressions through-out the world, people had paid 20-40% down on their homes and busniesses. Today we have TRIPLE NET LEASE in commercial real estate and 30-50% of homeowners already underwater in their homes. And these homes were financed with 3-4% interest rates which allows a person to afford a much higher priced home than an interest rate of say 8-10-12%.
When the United States suffers its first collapse by the upcoming financial and dollar devaluation… it will have not much time to recover before the second and more damaging collapse makes its way on its shores… and that is extremely high prices for energy as well as increasing shortages.
Balz….. you may consider renting in a more rural community where you can be protected from the crazies in the city. This will give you space and time to allow your precious metals to cook and grow in value while land and home values continue to collapse.
Good luck…..
Thanks SRSrocco. I do respect your opinion a lot because I am on the same page as you are about Peak Oil and falling EROI.
We are on the bumpy plateau right now. The current crisis makes people use less oil, and that gives more time before the total collapse.
However, living in Canada, I wonder if things might play out differently. In the US, prices are much depreciated… This is not the case here. Well, not yet.
I will think about that suggestion that you and others said: renting a house. However, I am not sure about this one for some reasons. The first one is that moving is expensive. The second one is that its much more easy to kick me out anytime. The third one is that if I have to move again I won’t have created enough local links with a community before the crash.
This is why I was thinking about buying first, and trying to barter with neighbours, to prepare for what is to come.
About hyperinflation, I am not sure if it will occur. I think Armstrong’s make a good point about it been impossible in a core economy. Maybe in the end the reset button will come…
I say PMs are what to have right now, for the following reasons.
1) when we buy land now, we don’t own it. If you don’t believe me, try to not pay your property taxes. I believe that China has some kind of deal going on where they have the land as collateral on their debt.
2) when the SHTF, and you need to “get out of dodge” you can’t take your land with you.
3) why use your captial on land, when you can go for a long term lease? I know that you don’t have the security of owning it, but see reason #1 for the answer to that illusion.
I know here in MN rural land like that is climbing steadily in price and availability is dropping as people try to get out of the big cities or want a second vacation place. They lose the city house due to job loss many move to the “cabin” (some are nicer than my house) as their primary residence. So you have to look at future availability along with future gold and silver prices. You may be able to buy half a city block for what a decent 20 acre wooded lot will run in the future.
It always amazes me how easily we forget what gold is. Gold is a standard. It is an asset where all other assets can be judged by for their value. It is the ultimate money. It is made to be kept as wealth and spent as money. Because gold is a physical asset, it too has a value cycle. Since it has increased in value about 7 times from its low, it may have used up its undervaluation and is back to fair market value. From here on out it may go up in Dollars, only as other things depreciate in dollars, leaving its purchasing power even. It is a standard from here on out.
Land also has a cycle and you would know better than I where your land is priced according to its real value. You need to determine the lands value according to location, richness and water availability and such. I personally do not think Canada will suffer as much as other nations because it is rich in minerals. I how ever would never live in a big city anywhere. In the US I am buying properties for 25% of last sale, and assessment, as I did 30 yrs ago in the last cycle. Never pay up for property. There is always a deal somewhere. Your gold will do you no good if you only hold it and never spend any of it while you suffer in an apt wishing. Remember also, 5 to 10 acres is hard to farm strictly by hand, without the benefits of energy.
I am trying to say you need to look at your gold as a way to make your life better. Look at gold as it was meant to be. Look at it in purchasing power, to make your life better, not in dollars.
When only 1% of the people own silver or gold it’s hard to to believe it has reached its real value regardless of inflation and manipulation!
Thanks to everyone who answered my question. I will have to think about it further and I will re-read what you kindly wrote. Thank you very much.
It depends on what type of land you meant. If you meant lands where you can produce stuff that you need, then these type of lands will be worth more than lands that you can live on them. I think that during the collapse, fiat currencies will be gone and people who lost all their savings because of the collapse will try to find alternative ways to store their wealth such as with gold and silver and they’ll abandon their lands to search for food. You can’t live on a land forever because imagine if during the collapse, thieves loot your land or if they attack you. My point is that you may have to abandon your land during the collapse and you may not be able to sell it quickly. Gold and silver demand will rise because it’ll become money and they’re easy to transport so I’ll say that gold and silver will be worth more than lands. Historically, lands are worth less than gold and silver because at that time, gold and silver had bigger purchasing powers.
I think almost everything is better bought *after* the reset. That includes land.
Only difference is if you want out *now*. Otherwise, take the risk and stick it out, IMHO.
I know it might be a challenge or even a lost cause, but starting right now with smallish
farm lands *and* spending your PMs on it I think for most ppl that would lead to fail
before they can prosper.
Just MHO,
R3K
“You can’t live on a land forever because imagine if during the collapse, thieves loot your land or if they attack you. My point is that you may have to abandon your land during the collapse and you may not be able to sell it quickly.”
Nope, sorry, not happening. My SHTF place is in the country and is excellent farm land. It will grow all the food my family and I need. We will be heavily armed, well trained, and will not be stolen from or pushed from our land. There is nowhere else to run to that will support us as well as this and maybe not at all. I can’t see putting years of time, effort, and money into something that will support us only to be run off by thieves or other vermin. Fortify it and protect it from all comers. Doing that could be risky but not as risky as being blown around here and there like dry leaves in the fall.
No. Land strictly speaking from a value perspective isn’t as cheap as silver. This however, is more complex then a simple valuation of pm’s value to land value. You should consider whether yourself and your family would be better served in the long run by becoming accustomed to the lifesytle of sustainability now. If you ask me, I’d say that the experience of property aquistion, and the responsabilities of said ownership would be better learned now, than in any post collapse situation imagineable. Buying property now, that is safely outside of any urban corridors or major interstates, is a hedge against future uncertainty (like the total breakdown of law and order.) I wouldn’t buy rental properties, because I envision it getting bad, and when it does, possession will be 10/10s of the law. In my opinion, if you can’t move out, or bug out, then you absolutely must have a plan to bug in. Try living without electricity and running water for a few days, and you’ll be able to better assess where you’re falling short.
That’s the whole question.
I have to put the experience and the skills that I will learn in the equation.