Thoughts on Barter and Trade Part 3 is the third part of a series. You can read Part 1 HERE, and Part 2 HERE.
Barter & Trade of Precious Metals
When it comes to Precious Metals (PMs), unless you are wealthy, start slow. A few silver dimes & quarters at a time. When you feel it is time to get gold coins, stay with the small denominations. And remember that there will be some people that will not trust or want them.
What good is gold and silver? Food will keep you alive, fuel will get you somewhere. Labor is… well, labor, and applicable to many things.
Not everyone will take precious metals in trade. But at some point at least some people will. There will still be a need for a medium of exchange. It is not likely that paper currency will do. If people have already gone to a barter and trade economy, they are not going to want the old currency. People will not trust it.
Trade, Barter and Trust
At least some people, and perhaps many eventually, will trust recognizable forms of gold and silver, just like people have since the very beginnings of modern civilization. Barter is great, but you still need a medium of exchange. A means to acquire things when you do not have the trade goods the other party wants. Some means to set values that people can understand.
Historically, the ratio of gold to silver values has stayed fairly constant until the last couple of hundred years. For a long time it was 16 to 1. It is quite a bit higher now, but it will likely go down to more reasonable ratios as it was in the past.
Now, while I do not think it will fall as far as 16 to 1, if people can reach an agreement in a community on a fixed ratio things will be easier and less controversial when using precious metals.
The ratio of 36 ounces of silver to 1 ounce of gold makes conversions using silver and gold bullion coins fairly simple. Two hundred pre-1965 quarters per ounce of gold, or five hundred pre-1965 dimes. That is twenty quarters for a tenth ounce gold coin, or fifty dimes.
Jewelry & Gems in trade
Taking jewelry or gems in trade gets very tricky. It is better not to consider it, except as a separate, specific business, where the jewelry and/or gems are purchased for gold or silver coins. Then the gems, if any, are removed, and the precious metals refined and used to make other products or traded to someone that can make their own coins. Jewelry will eventually make a comeback, so holding the gems long term is probably the best way to deal with them.
One thing that should be noted, is that in current times, barters/trades are considered taxable transactions. Regular, on-going barter/trade, or barters/trades of significant value, should probably be recorded with the Fair Market Value, priced in US FRNs (Federal Reserve Notes [Dollars in other words]) and the record kept available in case of inquiry by the government, be it State or Federal.
If a tax must be paid, it is much better to have a reasonable value recorded than risk having the government assign any value they wish to the transaction, and pay the tax on that.
Values change over time in a crisis situation
Not all the items/skills listed will be of much value early into the event. It could be three to five years or more for some of the items to become valuable.
Many of the items are only appropriate if one already has the items or skills involved. They aren’t something you would acquire just for barter. Listed simply as a reminder that many things might be in demand in the PAW, and various hobbies or existing businesses and skills can be the basis of trade goods or services.
Try to have most of your equipment and several months of consumables before you stockpile trade goods, including Precious Metals.
Personally, I do not stock goods to trade for other goods very much at all. What I stock, and the reason I stock, is to trade for services, skills, and knowledge. No matter how skilled and knowledgeable one is, no matter how good a library one has, no one knows everything or can do everything.
People will need the services, skills, and knowledge that someone else has, and will need some way to pay for it. And in many cases, mine especially, additional labor is likely to be required at times.
That is why I stock a few things. Because those people with what I need are quite likely to not have the things they need in the PAW and will be desperate to get whatever it is they need in return for their special skill, knowledge, or service. Or labor.
About the author:
Jerry D Young
About the author: Jerry D Young is an Author, Prepper, Consultant, Philosopher who resides in Nevada. He has written over 100 books, many of which are available at this link:
“I have been a prepper for more than 50 years. I believe that the Boy Scouts and Girl Scouts have had it right for decades…”Be Prepared.” Unfortunately, we, as a country seem to have gotten away from that philosophy. There has been a disconnect from the “Old Ways so profound, some people don’t really understand where their food comes from.
That’s not a problem until the “System” fails. Be it from a hurricane, earthquake, tornado, flood or even a closed road or train route. The system is designed to get JUST what is needed to the stores JUST when it’s needed. So if the “System” fails, then the things we need…the things we believe will be there aren’t. That’s when being a prepper makes sense. Being able to be self-sufficient for the the time needed until the “System” recovers…regardless of how long that takes.
That’s why so many of my books incorporate the theme of “Being prepared.” Hope you enjoy them!”