ECON Say I have silver, how would I exchange for goods?

[1-12020]

So say I have silver.
The dollar dumps and is worthless or close to.
How would I even use the silver to buy goods or services?
Would it be like a barter system? Who would even want to barter?
I don't think I could go into the local Walmart and buy what I need with silver?
I'm not a man of much means but listening to gold bugs and others it seems wise to have some metals.

I'm not asking in jest, I really would like to know what people think?

Thank you

 

[Dennis Olson]

Means of exchange in the event of TEOTWAWKI would vary. Each transaction would be on the terms of the seller. Some might take PMs, and some might take food. Still others might take bullets. Another might want your daughter.

Your question is unanswerable, because once there is no functioning government, everything is up to the parties involved.

 

[Lone_Hawk]

I have had to plan for that question a couple of times over the last 10 years. My solution was to pick a value of silver prior to the event.

If prior to an event an Item was $150. If the value of silver was $15 an ounce at my designated point. Based upon the value of the item in silver at the time. So, if silver goes to $1,500 in FRNs then the value of the item would be $15,000 FRNs or 10 ounces of silver.

That seemed to be the fairest and most manageable approach as far as I am concerned.

 

[Lone_Hawk]

Means of exchange in the event of TEOTWAWKI would vary. Each transaction would be on the terms of the seller. Some might take PMs, and some might take food. Still others might take bullets. Another might want your daughter.

Your question is unanswerable, because once there is no functioning government, everything is up to the parties involved.

Dennis,

That is all very true. My approach is what feels good in my heart. YMMV depending on the snake you are dealing with.

 

[Tristan]

Basically you have to find someone with a product you want, who also wants to accept (or is willing to accept) silver; or, utilize a PM broker to convert your silver to a more liquid currency (whether that's FRN's, Yen, Marks, Agate Beads, whatever) which is accepted in common commerce in the environment you are in.

PM's are still a pretty niche thing from most people's point of view.

Maybe one day they won't be.

 

[jward]

I imagine that in the vacuum, some stronger person or org. would rise up to fill the need for standardizing and setting up the trade organizing guidelines. Anything from a mad maax warlord to a benign, comparatively more harmless committee would probably end up in the cat bird seat, when the blood and dust settled.

Then you'd probably see some form of reverting to the farmers market or open air market style, where in there was some method of standardizing methods of commerce. There would probably also be a strong barter and one on one system in place too, as people came to individual arrangements between themselves to assess value and terms...

 

[Dennis Olson]

I imagine that in the vacuum, some stronger person or org. would rise up to fill the need for standardizing and setting up the trade organizing guidelines. Anything from a mad maax warlord to a benign, comparatively more harmless committee would probably end up in the cat bird seat, when the blood and dust settled.

Do you understand that it would take 20-50 years for the "dust to settle"? If it ever did.

 

[Loretta Van Riet]

Not to make light of the question, but some may want the exchange of durable goods like bread makers and chest freezers!

 

[Dennis Olson]

Indeed!! (But there has to be electricity)

 

[jward]

nationally it well could. Assuming there would ever again be a "nation" as we now know it, which I guess is very improbable. Smaller communities will be far quicker, and some of them have already got the rudimentary structures in place.

 

[20Gauge]

I have had to plan for that question a couple of times over the last 10 years. My solution was to pick a value of silver prior to the event.

If prior to an event an Item was $150. If the value of silver was $15 an ounce at my designated point. Based upon the value of the item in silver at the time. So, if silver goes to $1,500 in FRNs then the value of the item would be $15,000 FRNs or 10 ounces of silver.

That seemed to be the fairest and most manageable approach as far as I am concerned.

Makes sense, but as Dennis put it, not viable during the end of the world. You are still thinking as if money (FRNs) have value.

 

[20Gauge]

I imagine that in the vacuum, some stronger person or org. would rise up to fill the need for standardizing and setting up the trade organizing guidelines. Anything from a mad maax warlord to a benign, comparatively more harmless committee would probably end up in the cat bird seat, when the blood and dust settled.

Then you'd probably see some form of reverting to the farmers market or open air market style, where in there was some method of standardizing methods of commerce. There would probably also be a strong barter and one on one system in place too, as people came to individual arrangements between themselves to assess value and terms...

At some point this would be accurate, but how long would it take? Bullets / beans / daughters will have far more value for the immediate term to longer term than actual silver.

 

[Dozdoats]

Right now you would sell it to a dealer for FRN$ and spend the FRN$.

Later the situation will be more ... fluid. And it may take a while to sort out. Given the abysmal level of ignorance about economics in general and monetary hostory in particular in the ZUSA ...

 

[jward]

It would depend on the area, I think. Some communities are ready to roll, now, and already there would be some taking the silver and providing that transference into whatever the given community was using for it's units of wealth--- Assuming silver was even considered a store of value in whatever brave new world we entered.

 

[Dennis Olson]

jward, at the point where PMs are taken directly as "money", the government will not exist. (Sure there are a few places that do it today, but they are EXCEEDINGLY rare.)

 

[shane]

PM's, IMO, are for those with much $ left over after first
acquiring all their prep essentials; food, water, arms, etc.

If blessed to have remaining funds afterwards, then it's
prudent to get some of that hard-earned wealth into a
variety of diverse forms (like barterable goods & PM's),
instead of solely & only be holding cash and/or paper
investments, like equities, mutual funds, 401k's, etc.

Anybody here can say they'd never take PM's in-trade
for any of their food, meds or ammo, and that's perfectly
fine, but nobody can ever say what other sellers might
require of them, for what they have, that you might find
yourself, unfortunately, desperately in dire need of.

In dark future, you don't know what that doctor or dentist
or pharmacist might demand to get your deathly ill kid to
the front of his mile long waiting line. If he's already well
loaded up on potatoes and chickens and canned goods,
from all others before you, then some gold/silver coinage
might be just the ticket for him then, if you had any...

Make sense?

Panic Early, Beat the Rush!
- Shane

 

[20Gauge]

PM's, IMO, are for those with much $ left over after first
acquiring all their prep essentials; food, water, arms, etc.

If blessed to have remaining funds afterwards, then it's
prudent to get some of that hard-earned wealth into a
variety of diverse forms (like barterable goods & PM's),
instead of solely & only be holding cash and/or paper
investments, like equities, 401k's, etc.

Anybody here can say they'd never take PM's in-trade
for any of their food, meds or ammo, and that's perfectly
fine, but nobody can ever say what other sellers might
demand of them for what they have that you might find
yourself, unfortunately, desperately in dire need of.

In dark future, you don't know what that doctor or dentist
or pharmacist might require to get your deathly sick kid to
the front of his long line. If he's already well loaded up on
potatoes and chickens and canned goods from all others,
then some gold/silver coinage might be just the ticket for
him then, if you had any...

Make sense?

Panic Early, Beat the Rush!
- Shane

Agreed, but you make the argument to have a small bit and not a huge horde of PM.

Contingency planning is always good. $50 - $ 100 in junk silver face value should be more than enough to handle almost anything.

 

[Txkstew]

A friend of mine's Dad had a Snapper fishing boat back in the 60's and operated out of Port Arthur, Tx. He would go down to Belize, or British Honduras at the time and buy fish from the local villages. In the Village of Placencia, he set up a fishing Co-op and brought a big generator and equipment to build an ice plant. He'd come down on a schedule, and buy the fish and pack them in ice on his boat for the trip back to Port Arthur. He brought currency to the locals, who improved their life styles and bought boats and outboard motors. The village was electrified with the generator and some opened restaurants and bars.

A hotel was opened. I went down there on a trip with my friend in 1979 and stayed with a local friend of theirs. The man had set up a small general store in his house, and with the help of my friend who brought him a small freezer. He sold canned goods, dry goods, frozen chickens and meat, sodas and beer. All of this was made possible with the income of the fishing co-op. Now days, Placencia is a booming resort area with it's own airport and scheduled flights from the Capitol Belize City. Yes, it took 50 years to get to that point, but things got better from the early days. They should put up a statue of my friend's Dad in a park.

[WHITESPACE ADDED - Dennis]

 

[West]

I muse...

If one can provide a needed service or commodity then one would be exchanging for silver, gold etc...

Once the fed dollars become worthless. Or a new FIAT will be enforced by force. And PMs outlawed. Forcing them to increase in value but only in the black or deep market.

We will soon see, I think. But been saying that for over 20 years now. Uhggg...

 

[Hfcomms]

To get back to the question about the silver. This is why the so called 'junk' silver coins are important. Everyone recognizes them as money as they are the familiar dimes, quarters and half dollars everyone already knows. You can teach a young child the difference between a silver quarter and a clad quarter in under 30 seconds.

When the dollar totally falls on it's face both silver and gold are going to take off like their is no tomorrow. When that happens and everybody wants them you won't have to struggle too hard for someone to take your silver coins. How can I be so sure? History, even recent history. The people living in Venezuela that had a little bit of gold or some silver were still able to eat. Those without stand in endless lines hoping to find something left in the store.

If you are a store owner or a farmer during this time and the government puts strict price controls on everything and the dollar is rapidly hyperinflating a little silver is going to go a long way. Everyone is going to be looking for something tangible having real value. The paper money has no value while the metals have not changed over time. Your local farmer or orchard might not want to take paper currency if they have extra to sell but they sure as heck will take your silver.

 

[Txkstew]

Belize City is NOT the Capitol but is the major International airport. Belmopan is the Capitol. Sorry

 

[Dennis Olson]

Sorry West, but very few people will turn over their PMs these days. As to focing trade in fiat "money", two words: BLACK MARKET.

 

[Tripod]

PMs are a hedge to increase your wealth during good or bad times. End of the world not so much. Never could figure out how much to scrape off the gold bar to buy anything.
Mike

 

[20Gauge]

I muse...

If one can provide a needed service or commodity then one would be exchanging for silver, gold etc...

Once the fed dollars become worthless. Or a new FIAT will be enforced by force. And PMs outlawed. Forcing them to increase in value but only in the black or deep market.

We will soon see, I think. But been saying that for over 20 years now. Uhggg...

You are not wrong, but you do have the wrong point in time.

Things like this only work once, but when they work. They are epic.

 

[Dozdoats]

Forcing them to increase in value but only in the black or deep market.

FREE MARKET, please. You are sounding like a statist. Willing buyer, willing seller, agreed on price = free market.

 

[Txkstew]

Thousand ounce bars can be melted down and cast into small coins. A one ounce coin or bar could be cut with a hacksaw into smaller pieces. In the 1500's and 1600's the Spanish had pieces of eight silver coins, that were made to break into eight small sections.

 

[Dozdoats]

Pieces of eight were 8 reales coins. That was a denomination, not a fraction. ETA - I should add that the Spanish trade dollar, or milled dollar, was the inspiration for the US silver dollar.

Trade dollars are silver coins, which facilitated trade in China and the Far East territories. Their popularity was fueled principally by the established and known trade value of the Spanish coin 8 Reales. They formed a core transacting trade medium between the Far East and major political players of the 19th century.
History of Trade Dollars - PCGS

www.pcgs.com/news/history-of-trade-dollars

US silver dollars and some other coins were sometimes cut into eighths with each piece referred to as a "bit." Two bits was the equivalent of a quarter..... the ORIGINAL "bitcoin"

Two bits, four bits, six bits, a dollar as the old cheer went ...

And the Vikings were well known for what they called hacksilver - larger silver flatware or other items chopped up into pieces small enough to weigh out for a transaction in the absence of coins.

Hacksilver - Wikipedia

en.wikipedia.org

-- https://upload.wikimedia.org/wikipedia/commons/f/f4/Cuerdale_hoard_viking_silver_british_museum.JPG

 

[Dennis Olson]

WOW!! Learn something new every day here!

 

[Troke]

Back at Y2K, we had several people on this forum buying all the silver they could get their hands on because they knew at year 2000 the POS$ would turn into a genuine POS, nobody would accept, PM's was the only way to go.

And I kept asking what is the mechanism that triggers the merchant into deciding that a pint of flour is worth $.20. Where does he get that info? He guesses wrong, bankruptcy.

Crickets. But the price of silver jumped so they made out like bandits anyway.

 

[vestige]

WOW!! Learn something new every day here!

Two bits, four bits, six bits a dollar.

All for Timebomb... stand up and holler!

Old cheering standard slightly modified for forum use.

Remember it now Curmudgeon?

 

[20Gauge]

WOW!! Learn something new every day here!

You didn't know that? It started with the Spanish coins and migrated to US coins. In fact up to the Civil War (War between the States), the US had more foreign coins in circulation than US coins. We had a real shortage of coinage for a long time.

 

[Dennis Olson]

Nope. I never knew how that term came to be.

 

[20Gauge]

At that point in time people didn't trust the government's weights and measure either, so many traders and merchants used scales and their own weights to verify amounts paid and given for goods and services.

There was also a practice call coin shaving (something like that), where people would shave off a bit of a coin before using it. the buyer then would assume full weight of the coin was there when it wasn't. One of the reasons for the markings on the edge of a coin.

People would also electroplate silver nickels and use them as gold coins. The mint made the error during their "greek" phase and make a particular nickel look almost the same as a gold coin $5 value. So what did people do? The found the silver nickel and plated it as fast as they could find them.

That got changed real fast.

 

[Dozdoats]

The 1883 "Racketeer" Nickel - CoinSite

Some of these "Racketeer" nickels survive today. There are many nickels that have been gilt and passed off as the "real" thing, so beware of "copies".

coinsite.com

The 1883 “Racketeer” Nickel

In 1883 the Mint issued a new 5c coin with the head of Liberty and a Roman “V” meaning “5” on the reverse. Many people thought that the coin was an error since in didn’t have “cents” anywhere on the coin.

The lack of the word cents created an opportunity for the unscrupulous. The coins were gold plated and reeds were cut into the edge by hand (nickels have a plain edge) and they were passed off as $5 gold coins.

The most famous criminal case about altered 5 cent coins involved a deaf mute named Josh Tatum. He would go to cigar stands and purchase a 5c cigar and pay with a gold plated, hand reeded nickel. The attendant would assume that it was a $5 gold piece and give Josh $4.95 change. He was acquitted since he never said that the coin was $5, he couldn’t. The Mint learned its lesson and later that year put the word “cents” at the bottom of the reverse.

Some of these “Racketeer” nickels survive today and are interesting to collectors. Over the last century, there are many nickels that have been gilt and passed off as the “real” thing so beware of “copies”. Its not easy to ascertain whether you have a “genuine” racketeer nickel as they are all altered coins tampered with outside the Mint. Generally, the ones used in 1883 have some or all of the gilt rubbed off and have a very carefully reeded edge.

 

[Seeker22]

Makes sense, but as Dennis put it, not viable during the end of the world. You are still thinking as if money (FRNs) have value.

FRNs have not had true value since we went off the gold standard. That said, as long as I can get necessary food and stuff with them, I will. When I can no longer do that- I'll go to plan B.

 

[West]

The 1883 "Racketeer" Nickel - CoinSite

Some of these "Racketeer" nickels survive today. There are many nickels that have been gilt and passed off as the "real" thing, so beware of "copies".

coinsite.com

The 1883 “Racketeer” Nickel

In 1883 the Mint issued a new 5c coin with the head of Liberty and a Roman “V” meaning “5” on the reverse. Many people thought that the coin was an error since in didn’t have “cents” anywhere on the coin.

The lack of the word cents created an opportunity for the unscrupulous. The coins were gold plated and reeds were cut into the edge by hand (nickels have a plain edge) and they were passed off as $5 gold coins.

The most famous criminal case about altered 5 cent coins involved a deaf mute named Josh Tatum. He would go to cigar stands and purchase a 5c cigar and pay with a gold plated, hand reeded nickel. The attendant would assume that it was a $5 gold piece and give Josh $4.95 change. He was acquitted since he never said that the coin was $5, he couldn’t. The Mint learned its lesson and later that year put the word “cents” at the bottom of the reverse.

Some of these “Racketeer” nickels survive today and are interesting to collectors. Over the last century, there are many nickels that have been gilt and passed off as the “real” thing so beware of “copies”. Its not easy to ascertain whether you have a “genuine” racketeer nickel as they are all altered coins tampered with outside the Mint. Generally, the ones used in 1883 have some or all of the gilt rubbed off and have a very carefully reeded edge.

But in reality, its really easy to determine that it was just a plated nickel. Even in those days if not more so. The people who did fall for the scam probably deserved it.

Between the weight and sound, not to mention a quick peen or dent, would be the truth of the coin. I bet many counterfeiters where caught in the act and if they lived threw the public justice, I bet they didn't try it again.

Its really easy to tell the difference between copper/nickel and 90% gold even. To those who work with the metals.

 

[Dozdoats]

FRNs have not had true value since we went off the gold standard.

Despite Troke's efforts to make it so, the gold standard was not the be all and end all. America was founded on SILVER. The dollar could be exchanged for silver up until the mid to late 1960s. THAT is when the US Dollar finally died, When the 1$ FRN took the place of the silver certificate of the same denomination.

 

[Doc1]

IMHO the US Dollar is not going to disappear or go to zero value overnight. There are very few events - again, IMHO - that could cause that. What might? A nuclear war (especially a somewhat limited war that we lost), a massive asteroid strike or similar 'end of the world' events. In those cases, we'd have bigger problems than currency, silver or gold.

What I think is far more likely to happen is an accelerated version of Dollar devaluation. The US Dollar has already lost somewhere in the neighborhood of 98% of its value since 1913. Very few major currencies have gone to zero overnight. Even the German hyperinflation took a couple of years to play out. I personally saw the beginning of Zimbabwe's hyperinflation first hand and even that took a long time to come to its conclusion.

Precious metals - and other - investors often want to see everything tied up in a neat package with "official" predictable values and results. It usually doesn't work out that way in a hyperinflation. Even today the official COMEX PM values are more and more widely understood to be rigged. No one can buy gold or silver at the COMEX prices and only fools would sell personally held metal at those prices. Look at eBay. The prices there represent a far more realistic representation of what physical metals are actually selling for and those prices are much higher than the COMEX print. In Zimbabwe - and later in South Africa - the official posted exchange rates always depicted the national currencies as being worth far more than the real world street values.

Today, some PM dealers and pawn shops act like they're doing you a favor by paying "full spot prices" for the PMs they buy. That's a farce too, because they can't buy the metals for the spot price in any quantity. The more honest dealers are paying a premium over spot. A lot of the seedier dealers are still trying to buy at well under spot. The lower they try to go, the more they limit their walk-in trade to the stupid or criminal.

The sinking US Dollar value will require everyone to become more of a wheeler dealer and haggler and understand that there is increasingly no valid official value. If you wish to buy or sell PMs, work on increasing your bargaining skills. Eventually, fluctuating prices and bargaining will become more and more the norm, even for things like food and daily necessities. In most countries around the world, housewives learn to become expert hagglers even to buy food. If third world ladies can learn to do this as a matter of course there's no reason why you, as an American can't learn to do the same thing.

Lastly, I'll observe that any number of PM holders are waiting for the moonshot that will take their holdings into the stratosphere. I'd like that too, but it will result in another problem for you: At that time, will you really want to swap your metals for a rapidly-depreciating currency? Personally, I see PMs in a hyperinflation to be useful for buying small amounts of currency at a time and bartering for goods both large and small. Maybe you'd like to trade an ounce of gold for a new (or newish) car or truck. Maybe you'd like to trade for land or income-producing rental property. With smaller amounts of PMs (to include silver), perhaps you could trade for expensive tools, agricultural equipment or consumer goods.

Anyway, those are my thoughts. If we had a time machine or a crystal ball, we'd all be rich, right?


Best
Doc

 

[1-12020]

In dark future, you don't know what that doctor or dentist
or pharmacist might demand to get your deathly ill kid to
the front of his mile long waiting line. If he's already well
loaded up on potatoes and chickens and canned goods,
from all others before you, then some gold/silver coinage
might be just the ticket for him then, if you had any...

Make sense?

Panic Early, Beat the Rush!
- Shane

Thank you Shane . This helped me get a better understanding!

And to all who answered the questions.
Thanks you all were helpful

 

[Dozdoats]

Doc,

I'm waiting for the rocket launch that will take my PM stocks over the moon again, as it did in 2000. The physical PMs were where most of the proceeds from stock sales went (other than income cap gains taxes). PM prices can do what they do, PMs need no water and food (just the dogs do).