When panic strikes

This is the last in ASI’s series on how silver and gold can save lives and lifestyles. In this vignette, Rich Chekan looks at the role of gold and silver in a financial panic.

Have you heard of the Panic of 1873?

It was one of the greatest economic collapses in history. The financial debacle began when the Reading Railroad declared bankruptcy. An ‘Industrial Black Friday’ ensued. During the next four years, 15,000 companies and 600 banks closed. National unemployment rose to 20%.

But, markets weren’t the only casualties. In the 1890s, it wasn’t uncommon to see once wealthy businessmen and industrialists either take their own lives or disappear forever. Such is the power of emotions when unbridled success is suddenly replaced by abject poverty and creditor onslaught.

Have you heard of the Crisis of 2008?

Of course you have. We all just lived through this less than a decade ago. For many, the memories are as vivid as if they happened just yesterday. And, the damage was very similar statistically to the Panic of 1873.

In 2008, the average investor lost 39% in the market pull back. This required 67% in gains over eight years to recover. Those heavily in tech stocks suffered a similar fate only six years earlier during the tech bust.

Panic of 1873 Charts copy


Did gold and silver do their job?

What many people do not know is gold and silver initially were sold off in the early stages of the crisis. Many look to these first few days and incorrectly surmise gold and silver failed in a crisis.

However, if you look a little closer, you’ll see they were the first assets to recover. Why? Simple. They were stores of value, in a liquid form, for a potential financial crisis. They were sold off because there was a financial crisis. People needed to meet margin calls, pay the bills and so on.

Once their job was complete, people immediately bought back in to take advantage of the depressed prices and to rebuild their insurance position in gold and silver.

Of course, financial crises are not the only threats to your wealth. Those threats can take the form of zero or negative interest rates, wars on cash, etc…

You shouldn’t wait for the crisis to buy your insurance.

That’s why we have made it easy for you to add 90% silver in affordable home stored bags to protect your future and your safety, no matter what the economy hands you. Click here to take advantage of ASI’s special offer for Self-Reliant readers and secure some pre-1965 U.S. 90% silver coins – ‘junk silver’ – at well below our usual minimum order size.

And, keep an eye out in your emails for future stories of how gold and silver have protected wealth and the lives of their owners throughout the ages.