Ammo is insurance not savings

OK!! I don't sell anything.

you can put them in your safe and sell them down the road for about as much as you paid. And they are a hedge against inflation.

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Hmmmm, sorry - that doesn't wash. If you sell something later for less than you paid for it - and inflation has made costs/prices rise - how does that act as a hedge against inflation? It would need to go up in value at a rate greater than inflation

Hmmmm, sorry - that doesn't wash. If you sell something later for less than you paid for it - and inflation has made costs/prices rise - how does that act as a hedge against inflation? It would need to go up in value at a rate greater than inflation

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True. But in my experience, ammo also goes up, at least with the rate of inflation, so would also appear to be a hedge against inflation.

The real difference is not "savings vs. insurance." Ammo is expendable, while firearms are not. So even if both were hedges against inflation, you will not actually realize any "gain" from ammo because you will have to replace the stuff you bought in the past more cheaply with the newer stuff that now costs more.

So, the quantity of ammo kept on hand should be determined by something other than its "value" as a hedge against inflation (which is illusory). Typically, that will be determined by how much you think you need to (a) weather supply disruptions like we've been seeing lately, or (b) have on hand for TEOTWAWKI. But in the end, I guess this is what the OP meant by "insurance."

Of course you also have to factor in the condemnation of the fudds who claim they can't get ammo to shoot because you bought it all up when there was plenty available and now you're gouging them when you offer to sell it to those who didn't have the foresight to buy it when you did. Does that make it all worthwhile? :banghead:

And you can also factor in the enjoyment you received by owning a gun for a few years and shooting it before selling it for nearly what you paid for it. That's something that's hard to put a price on.

The best solution is to buy and never sell if you can swing it.

Uh-Oh, is it possible to be over-insured?

I like that. It also speaks to the zombie hunting throngs who wait for Walmart to open on delivery day. Some folks have never learned to save, they only understand the intermittent payday wad.

I pay more in ammo than insurance ...double coverage.

Hmmmm, sorry - that doesn't wash. If you sell something later for less than you paid for it - and inflation has made costs/prices rise - how does that act as a hedge against inflation? It would need to go up in value at a rate greater than inflation

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It is a hedge against financial collapse. The value of a stock may go to zero, but the value of a quality gun (assuming you don't accidentally destroy it) will never go to zero and will probably never decrease over the long haul.

I guess it depends on your definition of value. A gun's value is in it's shooting. If I buy a rifle to shoot deer with and it sits in a gun safe, that is not as valuable as a deer rifle that shoots a deer. And in order to do that, you have to have ammunition.

Value is determined by what somebody will pay or trade for the rifle.

In a financial collapse, it'll be a lot less than it is now.

In a financial collapse, it'll be a lot less than it is now.

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Not necessarily. It might be worth much more.

My gun and ammo collection is up substantially over the last decade; I bought mostly used and surplus and bulk ammo.

I could sell everything at a substantial profit percentage, from 10% to 100% - if I were selling, which I am not - from where I purchased. Yes the dollar has declined, however, I've factored that in.

For instance, I believe my first Glock cost me about $325 from 1999. I could probably get $550 for it in a day if I listed it. My SKS's were $150. I could easily get $400.

Was buying rifle and pistol ammo at 10-20 cents a round for years... Now worth 2x, 5x, 10x that value.

And on and on and on...

I would classify guns and ammo in many categories.

1. Insurance. Insurance on my safety and life. There is no better tools to protect me from direct criminal threat. There are many items like door locks that can also aid, but these are passive and can be defeated. My guns and ammo are direct passive and active insurance against violent crime and property crime.

2. Value and investment. As I said above, these have outperformed a lot of traditional investments.

3. History, Mechanical Tools, etc. Guns are fascinating in that they are really cool tools and rich in history if you're into that sort of thing.

bushmaster1313 said:

... guns are like savings, ammo is like insurance.

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You've made an reasonable analogy which should not be confused with erroneous thinking that guns ARE savings.

Fremmer said:

Value is determined by what somebody will pay or trade for the [whatever].

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That's a good definition of price, but not of value. Value has nothing to do with money and nothing to do with what anyone else thinks an item is worth. Value is simply the reason one decides to possess an item.

In other words, an item has value to someone simply because for that person it fills a perceived need. Value comparison is nothing more than deciding whether Item A has a higher usefulness to resource "tie-up or depletion ratio" than item B.

This relates to ammo very directly. Having plenty can be either savings or insurance, and it can be both at the same time. Savings, in that it could be bartered or converted into cash. Insurance, in that it's a hedge against an unknowable possible future occurrence.

For most people, there is value in holding ammo as savings and/or as insurance, but there are limits. One's ammo supply is valuable only to the point where he perceives that its usefulness as savings and/or insurance is outweighed by the amount of resources it ties up, precluding those resources from being used for something else. Economists call this "opportunity cost."

Ammo as savings:
If Joe has 100,000 rounds of 5.56 and a AR-15 with lots of mags, but no food and no place to hunt, his ammo has savings value in that it can be converted to cash which can in turn buy food. It has little value to him except as convertible savings; he is compelled to convert that savings into cash or barter it for food so he can eat.

He could use the gun and ammo to steal food, but let's assume he chooses not to go that way. Besides, at that point the ammo ceases to be savings and becomes a form of insurance.

Ammo as insurance:
Assume Joe has 100,000 rounds of 5.56 and a AR-15 with lots of mags, and he has enough cash to buy food. If the enemy invasion comes (could be a uniformed foreign army, or zombies, or...well, you can fill in this part), Joe is insured against being unable to contribute to the repulsion of said invasion, both in personal and collective terms. Or, if the invasion doesn't come but the civilized world goes to seed anyway, he can conceivably use the gun and ammo to compel someone else to feed him.

So, whether the ammo is savings or insurance depends on Joe's circumstances. Which is more likely? Each of us can decide as we choose.

When there's been a collapse, nobody has money to pay.

Of course, you can always barter your guns and ammo, but ya can't eat either, or use it for fuel, etc., but nobody will have much to trade, anyway.

There is a difference between something being useful, or even just desirable, that can provide value; I agree with that. But as far as an effective hedge against financial collapse, it's a lot like any other commodity, I suppose.
Although I'm not sure guns and ammo are properly classified as commodities, lol.

If you don't have ammo you may as well not have guns. One is worthless without the other.

guns have never been a good investment for me but that could be because my tastes aren't mainstream or when I sold I was too impatient, either way I buy what I want with no real thought to resale.

Ammo on the other hand I consider a very good investment only because I see the game the Politicians and Banksters are playing with our money, insurance? yeah but not to the exclusion of other preps. I'm always ready to add to my pile if the prices are palatable and that applies to food, ammo or pipe tobacco, my essentials

^^^
Taking shelter and clothing for granted?

Balrog said:

Not necessarily. It might be worth much more.

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I agree.

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btg3 said:

^^^
Taking shelter and clothing for granted?

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yeah to some extent I guess I am, give me a pair of bibs and my old homestead that's all I need.

Very true. It is insurance for lean times and is gun currency ("Bartertown": "Mad Max B. Thunderdome".)

The very high inflation of Argentina in the 80s prompted one guy to write an on-line article about it.
Even much more gradual inflation here will result in ammo/guns from the CMP (non-profit) being more expensive.

Based on that guys' article about Argentina, there never was what many of us describe as "a collapse"; everything functioned, but the problems were people trying to deceive and cheat each other in many small ways to keep up with the inflation.

He said that having a gun was Never the issue and very seldom needed, because it was the many subtle, deceptive actions of people that could cause problems.

On the other hand, I consider my guns to be "like" savings. They are not an investment. But after I enjoy them for a while I hope to be able to get back a fair amount of the purchase price.

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And that they shall: give you back a fair amount of the purchase price, if not more. But while you may not consider them an investment, they possess the character of a decent investment, in that they will hold their value over time, and perhaps even return a profit. That you get some use out of them along the way just adds to their value to you. In that sense, guns are just as much an investment as a house (and lately, a better investment!). Some economists will argue that home ownership is not a good investment. But while there may be better investments, for those with the diligence and skill, home ownership is popular because it is seen, just as you see your guns, as a way to get some return on money you were going to spend anyway (renting), and utility or usefulness at the same time.

BTW, something cannot be "like" savings, and not an investment. To most, savings and investment are the same. (To an economist, they are different: we put savings in a bank, the bank lends money to businesses to invest. But when people put money in a savings account or CD's and expect a return, that for them is "investment.")

But, enjoy your guns, both as you use them, and for anything you might realize from them if you ever sell them. Not too many things in life work out so nicely.