Your links make a wonderful argument for owning precious metals in small units! Swamp
Divisibility being one of the requirements for real money, people (and governments) have been cutting PM coins for millennia. Unlike eggs, a shotshell, or Federal Reserve Notes, dividing a PM bullion coin into pieces doesn’t destroy its value. Each piece retains its same fractional value as the whole. Fiat currency is not money, try tearing a $1 FRN in half see if you can get .50 for each piece
There was a study sponsored by FEMA back in the 80’s on how barter/exchanges/markets might function following a disaster on the scale of nuclear war, “Markets, Distribution, and Exchange After Societal Cataclysm”.
Beyond just descriptions of the different types of exchanges and markets that would develop, the use of money (and where it’s used and not used) for each is discussed too. The almost interchangeable way the authors use the terms “money”, “cash”, and “currency” might frustrate any goldbugs here, but the Keynesians probably won’t even notice at all.
It’s a long, mostly boring, read – But my take away from it, in short, is that barter will dominate at the subsistence and peasant marketplace levels. This is “hand-to-mouth” existence level exchanges mostly, a small amount of surplus salt exchanged for a small amount of surplus fish/meat. A few rifle cartridges exchanged for shoe repair. A days worth of food for 8 hours of unskilled labor. Preppers may not need to operate in these exchanges/markets much in the early SHTF days since we’ll likely be living off stored goods or growing/producing much of them ourselves, but these will be important as the first markets that develop and form the basis for the larger ones to come. Establishing some level of trust with other buyers and sellers through these small exchanges in the early days might be beneficial later.
But the further you get away from subsistence level bartering and start dealing in larger and more diverse markets, then that’s where “money” will dominate. The study uses the term “lumpy goods” to describe these types of transactions, “lumpy” not just meaning large or bulky (like housing, or livestock), but also for things like medical care (imagine purchasing an appendectomy, where you’re trying to procure a surgeon, nurse, maybe an anesthesiologist, and all the necessary supplies – and purchase it as a single transaction). Lumpy would also include services such as transport/shipping, like hiring cowboys (Old West style) to drive those livestock you purchased to your door from 3 counties away – or contracting a rail train owner/operator with a working steam engine and a cattle car. This is where you want and need PMs, because they have always been money.
Oh, and lest anything think the study is just a politically correct and academic discussion with little real SHTF worth and skip it, things like criminal markets, militias, survivalists, warlords, and assassination services are mentioned too.
Statistics: Posted by Matte — Fri Aug 04, 2017 9:34 am