The Essence of Money or Tools for Trade

 

The Essence of Money or Tools for Trade

 

I know. I know. What does this have to do with prepping?

 

After the survival phase of any catastrophe comes the rebuilding. What I mean is in the prepping world lots of time and energy is devoted to BOB’s, food storage, defense, shelter, water purifiers, etc. What’s not discussed is after everything comes apart, how do we put it back together, especially if the banks are closed and the dollar is worthless.

 

Even though we focus on getting ourselves prepared there will be many things we need or have forgotten in our quest to prepare for the worst. Our little group here in Montana has started looking ahead to how do we conduct commerce after TEOTWAWKI (to borrow a popular acronym). There are several ways in which we can obtain that badly needed roll of toilet paper after supply chains are broken and weeks have turned into months. I want to discuss a few:

 

Make it yourself. 

We can all make some improvements in this area. Just realize that no one person is an “Island unto Himself”. Many of the items we use and need are made with specialized skill and equipment. So until we’re back to riding horses and hunting with bows and arrows many items we need will be made by those who have developed those trades and abilities. Even then there will be limitations on raw materials. It’s not very practical to think we can do it all ourselves (especially the TP above).

 

That does lead me to another point. My belief is that producers (those that make important things or provide valuable service) will do best in a grid down situation. We won’t need as many attorneys, city workers, or welfare users. People will need to pull their weight to make it. That’s not to say the elderly or infirm will be abandoned. As a Christian, it is a duty to help those in need. I’m talking about able-bodied individuals who can’t or won’t produce something someone else wants or needs.

 

Barter. 

This works but not as well as you might think. If I have a cow, how do I get a few loaves of bread? If someone has a rifle I need, how much garden produce is that? Bartering will be severely limiting when everyone has different needs. For commerce to grow and prosper items must be bought and sold with relative ease.

Please don’t take this as discouragement against stocking up on barter items. Get as much and as wide a variety as you can.  That may be the best way to gain needed supplies in a pinch.

 

 

Metals. 

Now we could be talking about steel, brass, or lead. Or we could be talking about gold and silver. Now I would encourage all readers to get some metals after some of your basics are handled. With the prices down it’s a good time to buy.

 

There are some differing schools of thought on the need for metals. They meet the criteria for money in that they are durable, not consumable, transportable, etc. Metals are also a great hedge against inflation. They do rise and fall in price but they are never worth zero. 

As the video explains the major problem will be scarcity and pricing.  After the crisis the better prepared could trade until they control most of the metals. The same thing big banks do only right in your own town. Taking all the junk silver, rounds, etc. out of circulation would doom the rest of us if we relied on just coinage. Second, historical pricing history would be handy also. After the Comex or LBMA is bankrupt it will be difficult to determine market value (If afore said dollar is just paper).

 

The second issue is metals are just a place holder until you can trade for what you need. You can’t build shelter out of silver, heat with gold, or eat either one. If someone offered me 1000 oz of silver or a 20’x20’ room of food storage that would be a no brainer.  I’d take the food!

 

Alternative/Local Currency. 

Now I know in the ashes of Bitcoin this can be a touchy subject. I’m not talking about anything online or digital. In the event of EMP or power outage you couldn’t access it anyway.

 

I’m talking about creating something that works for your community. It could be bottle caps or baseball cards. We have been experimenting with trade notes that have local landmarks and denominations similar to other currencies. Around the country there are many local trade co-ops that have had varying degrees of success. The bigger ones are Berkshares, Ithaca Hours, Tucson… Just to name a few.

 

A few of the issues to consider are:

~Faith– the only thing that keeps the dollar going is enough people believe in it.  Same is true about local currency.

~Backing– For all pieces of paper to be worth anything they must be backed by metals, goods, or services.

~Use outside the area– How do you buy from people who don’t recognize your money.

~Counterfeiting– Easy to make trade notes, are easy to copy trade notes.

~Management– Who runs it? Compensation? Interest?

 ~Loans– It’s a way to get money into circulation as long as they’re producing something of value.

 ~Honesty of the members. What happens to the liars and cheaters?

~Historical Pricing– A $20 gold piece in 1900 could buy a good suit. 1 oz. gold or $1500 today could buy the same quality suit.

 

Like I said above we have had varying degrees of success in trading amongst our members. I have come to think that the development of a plan is the most valuable part. We realize that when dollars have replaced the above-mentioned toilet paper that another medium of exchange will be welcome by everyone. We’ve overcome a few basic hurdles but being prepared with special paper, color printer, some way to emboss or security measures, may be invaluable after the SHTF.

 

There’s a lot of left leaning info on the web (Berkshares/Ithaca Hours) and in books like Local Money. Nothing beats Mises, Hayek, or even Adam Smith for true free market solutions. If more info is needed maybe a part II could be in order. Let Rourke know.

 

Reuben W.

Western Montana


 

The above post was an entry into the ModernSurvivalOnline Preparedness Guest Post Writing Contest.

First Place winner will receive:

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3 Comments

  1. Yeah ! well those $123.28999 Ashes wouldn’t even buy you 1 / 150 watt solar panel now a day’s. & I wouldn’t batter for Ashes anyway.

    But let’s say Fuel & Electricity now those are item’s I understand, & I am in process of being on the begining of a small scale Production of the Fuel & also currently studing to be a SOLAR-ELECTRICIAN, So I could eventually provide the SHTF Electricity & Fuel(i.e.) – ( Gas, Diesel, Kerosene).

    Now think How are you going to get around when the SHTF is all Said & Done, You gonna go out via Horse, or Car ? How are you goning to get your batter to market ? Is it gonna be Fresh or kinda limp & starting to over Rippen or even rot ?

    you’ll be saying man I wish my trusty old bug-out-truck still had some gas in it. Or man I wish I still had Electricity to keep my freezers & frig going 1-3 yrs. after the gas pumps quit producing !

    Then come find THE SOLAR DRUID ! I’ll have both waiting….. For Sale that is !

  2. I’ll take the horse. Solar electricity will be useless a few years into an extended grid down situation. No new batteries will be made to replace the ones that start dying from sulfation almost immediately and other rechargeable batteries have a limited amount of times they can be recharged. How are you going to keep those freezer’s going at night?

    The only useful liquid fuels are going to be ethanol and liquefied fats. Neither require electricity to make and both have multiple uses. The majority of internal combustion engines will be useless due to no batteries, and the manual transmission cars and generators will eventually fail due to lack of lubrication. Motoroil can be used as a fuel and will most certainly be scavenged from derelict vehicles. Liquified fats will breakdown under the heat created in an ICE, and pure ethanol would destroy modern engines in short order.

    With no resupply plan for panels, batteries, petrol, or lubrication, your electricity and gas will be worth as much as my bitcoins.

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