Summary: Many Mormons do a great job of preparing for hard times with aggressive food storage, but often do little to preserve wealth should there be severe economic disaster. Those who are diligent savers and investors tend to put their wealth in stocks, bonds, and cash, leaving themselves unprotected for many potential economic problems in the future (inflation, recession, weakening of the dollar, etc.). Why is it, for example, that so few Mormons have considered precious metals as an element of wealth preservation?
Latter-day Saints are well known for their “quirky” food storage habits, based on wise and inspired council from Church leaders over much of the past century calling on us to store food to be prepared for whatever the future holds. My own family was greatly blessed by this form of preparation during an especially difficult year or so when I was on a mission. But the Church teaches us to do much more than just store food. Among other things, we are counseled to live frugally and to save money to be prepared for financial hardships. So how are we doing? Frankly, I think more of us are storing food than are saving aggressively. This must change.
Now if you aren’t LDS, you might think that diligent Mormons who are stockpiling food and saving money would have some kind of doomsday mentality, anticipating apocalyptic disasters. Frankly, I see very little of that – which is my complaint of the day. Not that I advocate hiding in a bomb shelter or living in wretched nervousness, but being prepared for the future, in my opinion, must include being prepared for the very kind of hard times that make food storage such a wise insurance policy. That means some degree of financial preparation for economic disaster.
Those that are saving and investing are developing reserves of cash and, quite often, stocks, that are ultimately based on the assumption of a continued healthy economy and a strong dollar. I am surprised by how few people have taken steps to hedge against a weakened dollar. In particular, I am disappointed at how few LDS people I know have invested anything in precious metals, an investment area that not only can preserve wealth in times of economic chaos, but which has also offered outstanding returns in recent years. Very few Americans in general know how and where to invest in precious metals. But you would think that the people who pursue food storage with religious zeal would also have some of their savings in something that will still have value in an economic collapse. Well, yes, they do: food could become a precious commodity – but it’s a bulky and perishable investment that really isn’t suited for protecting wealth but simply surviving. Of course, as several wars have shown, there is an agricultural commodity that can serve as money and be a valuable investment in times of hardship, but I don’t think Latter-day Saints should stockpile tobacco.
Well, I apologize for making this post touch upon such a secular issue as investment strategies. But I do think it’s interesting that the food storage mentality that is alive and well in the Church (to its credit) has not translated into a widespread acceptance of precious metals as part of one’s diversified portfolio. I think those who add some now will not regret it. (And for what it’s worth, I think silver is where the greatest action is going to be over the next few years. Still remarkably cheap, yet growing rapidly in value. Do your own due diligence.)
Just my two cents’ worth.
Ehhh… Precious metals are fine, but the sort of crash that would make any other kind of investment worthless would make the metals worthless too. What’s the point of gold, platinum, dimonds, or whatever when the only thing in demand is fresh water and food? Maybe I’m entirely crazy, but didn’t gold tank with everything else during the great depression?
Well… with that said, (I appreciate your take on the issue…)we would really be in a tight knot either way because our food storage is minimal, and the only precious metal that we own is on two fingers… my left ring finger, and my husbands. To be the ‘devils advocate’… do you think perhaps that if storing up precious metals were going to be truly benefical… the living Prophet would let us know “Start collecting”? I hope so!
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You can look at the historical price of gold at You can look at the historical price of gold at http://www.nma.org/pdf/gold/his_gold_prices.pdf. Gold’s price rose rapidly during the depression, with the exception of one year when, if I understand correctly, the deflation of the dollar brought it and most other prices down. Gold fell almost 20% in price from 1930 to 1931, but then rose from $17 back to $21 in 1932, then $26 in 1932, and was set at $35 in 1933 (though the real market price would have been even higher, as I recall, were it not for the confiscatory policies of FDR).
The story of the price of gold and the various smarket and non-market forces that have shaped it over the years is a fascinating one. But in general, if there is deflation such that a dollar buys more than before, it could buy more gold and the price might fall, as it did in 1931 – but even then, economic uncertainty and other factors may soon drive up demand for gold. However, with the rampant printing of money and massive deficit spending of today, inflation is a much more serious concern.
And yes, if we really enter an apocalyptic era in which civilization collapses – something like the dark horor of, say, Gilligan’s Island – then a pound of precious metals might have less value than a nice can of peaches or, naturally, an evening gown. But in almost every society, through every good and bad time in recorded history, precious metals, especially gold, have been universally accepted as money and have been a valuable way of preserving wealth in hard times as well as good. And I remain puzzled as to why diligent food stockpilers wouldn’t feel the same way. I’m not talking about metals mania, but including some as just part of one’s savings – a wise hedge for future times of trouble, as well as an awfully smart investment even if things continue to go smoothly, as I hope they will.
In India right now, a nation of dedicated savers, gold is very popular. We are seeing China beginning to buy gold. As nations ease off the dollar in the future, I think we will see gold and silver become a more reliable standard for wealth than the dollar. Might be good to stash some silver coins along with that peanut butter and wheat in your basement, as part of your diversified approach to preparing for future change.. Gold fell from $21 an ounce by almost 20% in price from 1930 to 1931, but then rose from $17 back to $21 in 1932, then $26 in 1932, and was then set at $35 in 1933 by FDR, who made it illegal for anyone but the government to own gold after 1935. The artificial price of $35 persisted until it was relaxed in 1971.
The story of the price of gold and the various smarket and non-market forces that have shaped it over the years is a fascinating one. But in general, if there is deflation such that a dollar buys more than before, it could buy more gold and the price might fall. However, with the rampant printing of money and massive deficit spending of today, inflation is a much more serious concern.
And yes, if we really enter an apocalyptic era in which civilization collapses – something like the dark horor of, say, Gilligan’s Island – then a pound of precious metals might have less value than a nice can of peaches or, naturally, an evening gown. But in almost every society, through every good and bad time in recorded history, precious metals, especially gold, have been universally accepted as money and have been a valuable way of preserving wealth in hard times as well as good. And I remain puzzled as to why diligent food stockpilers wouldn’t feel the same way. I’m not talking about metals mania, but including some as just part of one’s savings – a wise hedge for future times of trouble, as well as an awfully smart investment even if things continue to go smoothly, as I hope they will.
In India right now, a nation of dedicated savers, gold is very popular. We are seeing China beginning to buy gold. As nations ease off the dollar in the future, I think we will see gold and silver become a more reliable standard for wealth than the dollar. Might be good to stash some silver coins along with that peanut butter and wheat in your basement, as part of your diversified approach to preparing for future change.
Jeff – thanks for the post. I’m not LDS (yet) but read your post everyday before starting the work day. Your blog is truly a blessing.
Regarding investing in gold/silver, I would recommend that all savers consider the broader commodity market — I’ve put a good portion of my savings into a commodities fund that has done well for me. There’s much more than metals out there (oil/other energy, livestock/meat, etc) that can diversify the risk of concentrating one’s holdings in one metal. Also, these funds can deploy leverage for those who want to employ a little more risk in order to enhance the upside.
Thanks, Anon, I fully agree. Smart investing is about diversification and being in a variety of areas likely to grow in the future. Given the boom in emerging markets, the demand for commodities can be expected to continue for some time. That includes energy (oil, coal, natural gas, even uranium – other nations recognize it as essential for energy growth), a wide variety of metals (copper, aluminum, zinc, etc. – though steel may be a soft market because of China’s abundant production of it), and many other commodities.
Also, for those worried about the almost certain long-term weakness of the dollar, a portion of your portfolio might include international bond funds as well as international stocks.
And finally, no matter where you are financially, it’s not too early or too late to start saving and investing. Teenagers, do you realize that $100 invested now in a solid stock or commodity could become tens of thousands of dollars 40 years from now? Save all you can and be wise in your youth. I know a few teenagers out here in Appleton that have started investing already with their earnings rather than spending everything on toys and fun. I’m incredibly proud of them – and happy to report that the ones I’m closest to are beating the market by a long shot, thanks to investments in the commodity area.
I watched all the people who moved to gold in Jimmy Carter’s presidency. gold broke a thousand dollars an ounce in spot markets.
If they had bought stocks, they would be far further ahead.
On the other hand, real property, such as farm land and lumber land, that has some value that endures.
And is even harder for modern people to preserve, care for and connect with.
To understand what is up with the US dollar and the disasters we are facing – both economically and politically – you must read Representative Ron Paul’s (R-Texas) article, The End of Dollar Hegemony that was given before the House of Representatives in Feb. 2006.
Stephen is right that gold investors in the past few decades did not do well. Gold and silver both spiked, at which point the central banks of the US (and other nations) dumped many of their reserves on the market, bringing down the price and giving support to the dollar. Those reserves are not in place any more. The US government, for example, has to buy silver on the market to mint its profitable Silver Liberty coins. The huge reserves we once had are no longer there – and when the dollar tanks, they won’t be able to continue holding down the price of precious metals. This time, things are much different.
Ye cannot serve God and mammon. Therefore I say unto you, Take no thought for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than meat, and the body than raiment?
Behold the fowls of the air: for they sow not, neither do they reap, nor gather into barns; yet your heavenly Father feedeth them. Are ye not much better than they? Which of you by taking thought can add one cubit unto his stature? And why take ye thought for raiment? Consider the lilies of the field, how they grow; they toil not, neither do they spin: And yet I say unto you, That even Solomon in all his glory was not arrayed like one of these. Wherefore, if God so clothe the grass of the field, which to day is, and to morrow is cast into the oven, shall he not much more clothe you, O ye of little faith? Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed? (For after all these things do the Gentiles seek:) for your heavenly Father knoweth that ye have need of all these things. But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you. Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. (Matthew 6)
And if ye lend to them of whom ye hope to receive, what thank have ye? for sinners also lend to sinners, to receive as much again. But love ye your enemies, and do good, and lend, hoping for nothing again;
…(Luke 6)
When ever I think about monitary savings I always am drawn back to the saviors comments when he asks the pharisees whose inscription is on their money. Render to Cesar that which belongs to Cesar. I beleive when the time comes to truely test our surplus it will be our food that sustains us rather than our ability to purchase things with gold or money.
That being said, I beleive that wise investing and financial planning is a practice which can tie the hearts of our children to their fathers. I recently spoke in church on the matter, and felt that a true steward to his family will prayerfully plan for the future financial burdens of their children. My grandfather put great faith in the future of his children. For me a $2000 investment was made in Pacific Corp before I was born. If I had not used that money to pay for college the investment would be worth over $90,000 on todays market.
Our investments will in no way save us, but our ability to exercise wise stewardship over our surplus is a celestial attribute.
I think it is in Dueteronomy that says no diverse measures, you shall have just weights and balances.
Christ says render unto ceasar that which is his, well Federal reserve notes, stocks, bonds CD’s T-Bills, and all form of paper is ceasars ways with money, and gold and silver is commanded to be used as wealth.
Listen to
http://db.georgegordon.com/view_prog.php?prog=236
and he clearly gives scriptural background to avoid using fiat currency for God fearing people to operate.
I think you should repost this — it’s very timely!
you’re chasing performance brother.
This is an excellent commentary. I looked up the Mormons and was baptised in the LDS church after living in chaotic, war torn New York City 1985-92 – talked about “End Times” living!
I was very concerned that political and economic chaos might result in the US $ becoming like the Zimbabwean $ and I looked in to alternative currencies, precious metals – I even went so far as to put my assets offshore. But, ended up bringing them back as I found it not practical to try to live this way and still be a full time US citizens living in America.
I have found my LDS/Mormons to be very good people avoiding much of the corruptions of our day and doing some practical things regarding food storage, but few if any have any real plans for what to do as we are in economic chaotic times.
I would like to see the LDS/Mormons have separate banking/credit unions that are run on moral/strict banking standards – ie not making $500,000 loans for land speculation in wildly overpriced sections of the West.
Also, I note that many European cities have their own currencies to promote their local economies – shouldn’t the LDS do the same?