Whether for our normal daily life, or in preparations for the future, we have things we have to buy.
We also want to get the best bang for our buck which leads us to a more complicated process of deciding how many of what size. If what we want has a short shelf life then that becomes a factor as well.
Normally buying more of something will get you a lower unit price. Like buying meat in 10 pound chubs instead of 1 pound packages. Also, companies offer volume discounts for ordering multiples of the same item.
Since volume discounts are rather straight forward, lets look at figuring out costs based on quantity.
I went to a well known supermarket store on June 8th and noted sugar prices. I had to use two (regional/national) brands to get a range of sizes. They are close in price. Brand "A" was $3.29 for a 4 pound bag while Brand "B" was $3.19.
Here's what I found:
Using a 10 lb bag of sugar as our reference, we pay a 10% premium to buy a 4 lb bag. If we go for a 2 lb bag that premium jumps to 24%.
On the other hand if we want the convenience of sugar packets, we can get a hundred of those for a fairly reasonable 2.3 cents each. However, that come to a whopping nearly 300% premium over our 10 lb option.
We see similar patterns with gold and silver. During question and answer periods, I often get the question about should I invest in gold or silver? The answer they get is "salt".
From a preparedness standpoint, food and water are more important than gold and silver. I've also recommended silver over gold in most cases through the use of pre-1965 90% silver coinage. The downside is supplies of these coins are limited and American Eagles may serve as a secondary choice.
Because the dollar has lost so much value, gold is relatively expensive. Until now I've only recommended using gold for things like property taxes as gold should act as a store of value while the economy continues its decline.
I've seen silver as more reasonable for normal purchases as even a 1/10th ounce gold coin has a value of over $100. However, now we have a new option as the Karatbars company offers smaller amounts (down to 1 gram) encased in a plastic credit card size holder at a reasonable premium vs. 1 ounce coins.
As usual, I've done the math for you. These prices are from before market open on June 9th. First the gold coins (American Eagles):
As you see, the .10 ounce coin comes at a better than 10% premium vs. the 1 ounce coin. This is comparable to buying a 4 lb bag of sugar vs. a 10 lb bag.
Karatbars would be like buying the packets. How do they compare to sugar? Let's see:
The 1 gram or what you might call the "individual serving size" has a much more reasonable premium than sugar. While 1 gram is still more than you need to buy lunch, it is a reasonable size for purchases like filling the gas tank or buying a week's worth of groceries.
I expect the value of the dollar to continue to become worth less until it is worthless. That combined with world events leads me to believe that prices may be going up sooner than most may think.
This research is offered so that you can make your own investment decisions.
Click Here for more information or to purchase Karatbars.
P.S. The FTC wants you to know that I would make a commission off of purchases made through the supplied link.
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Consumers Charging More
Consumer Spending at 6 Year High
Half Can't Afford Their Homes
But are Increasing Second Mortgages
Average Car Age Highest Ever
Retirement Age Up
We've Reached the NIRP Marker
The Path to the Cashless Controlled Society
Ban the Bra
The Drone Assassin
The Restart Issue
600 New Laws... Just in Texas
Today it's about Spy Tech and Control:
Hacking the Brain:
Invasive Cat Scan
Real or Fake
Look at the Neuralyzer While I Put on my Sunglasses
Your Body Belongs to the State:
Simband the Smart Watch
Drone, Drone on the Farm
Just Checking Progress
And Everything Else:
Where Have all the Standards Gone
It's a bird, It's a plane, It's geckoman!
Facebook Listening Feature
Billions of Points
We'll be talking about this on the June 9th USA Prepares show.
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The FTC wants you to know that I do receive an income from purchases made through this link.
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John R. Ragan, Captain, USAFR (Ret), MBA, MS - your guide on our journey through The Financial State of the Union