The relatively new “Black Sky Days” spiel from David Fessler for the Oxford Club’s Oxford Resource Explorer is getting a fair amount of attention,and it’s a very long and involved pitch that is mostly about the fact that our electric grid is old, rickety and not well-protected… and that sells us on some ways to protect ourselves during the “black sky days” when power goes out nationwide, perhaps for as long as several months, and society and our economy collapse.
Most of the “action plan” and “blueprint” stuff they’re pitching I can’t comment on with any great gravitas — it’s fairly basic survival/emergency preparedness stuff like having a supply of fresh water, having some backup power either from solar or batteries a fueled generator, having a supply of nonperishable food, etc… but the “money” part of it comes down to a couple things that he talks about in some detail.
First is the idea of “disaster insurance” — which is basically his way of saying you should own some gold. Second is what I find generally more interesting, and which might provide an investing idea we can share with you, and that’s the “Capture Quick, Explosive Gains From the $3.6 Trillion Push to ‘Save the Grid'” bit that we borrowed for our headline here today — I was expecting it to be a push for either cybersecurity (since some of the potential threats are cyber in nature), or a push for one of the big electrical equipment companies like GE or Eaton… but the push is really for a solar company and a defense contractor.
We’ll start with the gold “disaster insurance.” Like pretty much any big newsletter publisher, the Oxford Club folks have a “gold guide” that tells you what kinds of gold there are and what to buy (and how) — but we’ve talked about much of that ad infinitum over the years (though it was a much more popular topic when gold was going up). If it’s really the disaster/post-apocalyptic/barter economy you’re thinking about and you think precious metals will, thanks to their history as “money” for dozens of generations of human beings, be a key part of that economy as a substitute for dollars or other fiat currencies, then you need to actually have and hold physical, divisible precious metals… which, if you want to keep it simple, mostly means gold bullion coins.
Owning stock in a gold ETF like GLD or in a gold mining company, or having gold stored in a vault in London or Hong Kong wouldn’t do you much good if the power’s out across the country and you’re trying to find a way to buy a few tanks of gasoline or some food for your family — presumably, in most of these scenarios, the world eventually comes back to normal and property rights have remained strong and those shares you have of GLD or those gold bars in Zurich are worth whatever gold is worth, and likely something more than zero, but that doesn’t do you much good if you’re planning what to do during these potential “Black Sky Days.”
And really, worrying about which coins probably means you’re spending too much time thinking about it — in any kind of disaster/world has collapsed scenario you’d presumably want coins that are widely known and whose quality and metal content will be trusted by large numbers of people, which pretty much means that Americans are safest with the American Eagle gold and silver coins from the US mint, or, if you insist on getting a bit more esoteric or trying to buy the stuff 1% cheaper, the Canadian Maple Leaf, South African Krugerrand, and maybe Austrian Philharmonic or a few others. Dozens of countries mint gold and silver coins, but most of them are not all that well-known and most people won’t have ever seen one — if you feel like you’ll need to use these coins to buy food someday, might as well get the ones your food seller is more likely to recognize and have some trust in without biting or assaying it.
Lots of folks talk about “junk silver” for this application as well, since that’s the smallest denomination you can easily find and use of “government authenticated” precious metals — the pre-1965 dimes, nickels, quarters and larger coins that were 90% silver, including the more collectible (and expensive, usually) older silver dollars like the Morgan and Peace dollars, are pretty widely held. Some folks use them today to accumulate silver a bit more cheaply than buying pure bars or modern minted silver coins, others stockpile them just in case we see either this kind of doomsday scenario or some sort of hyperinflation. Or you could