Our next currency

I was recently talking with a friend about the risks of hyperinflation with the dramatic increase in the money supply and the “stimulus plan”. Our currency may become worthless so what would be the best barter currency? They pointed out that gold has the problem of the smallest coins are not something you could use for relative inexpensive items like a bag of groceries, or a pickup load of wood for your fireplace. And a candy bar? Gold coins just don’t work in a lot of transactions.

Noticing a container of loose change on the kitchen counter I suggested our existing coins may not be devalued as much as the paper currency. The “copper” (mostly zinc now days) has a “melt value” of about $0.02 (see update below) right now due to the high price of metals. I also suggested ammo and bulk food that stores well like dry peas, lentils, and beans. Maybe, we agreed.

Early this morning I woke up with another answer, toilet paper! I then became discouraged because I realized that too would be devalued because of the over supply of paper currency that could be used for the same thing.

And Barb gets irritated with me because I’m such an optimist.

Update: My source on the “melt value” of a penny was apparently wrong. According to this site the current value is about $0.00297.


13 thoughts on “Our next currency

  1. On the issue of trading ammunition:

    Do you really want to trade something to someone that may come back at you some day, when the chips are down?

    I’m all for trading with known folks, but with unknown folks, not so much…

  2. Notice we were hesitant in our agreement about that being a viable exchange medium.

    I’m inclined to go with easily stored food. People immediately know it’s current value and someone is more likely to resort to violence if they are hungry and have ammo than if they have food but no ammo–to outline just one of many scenarios where food has an advantage.

    But then I grew up on a farm and know how to grow my own cheaply so that almost for certain biases my viewpoint.

  3. I agree with Less when it comes to not trading with people you dont know. Unless they had something that was needed for the survival of the group I was with, I wouldn’t even want them to know what we had. Remember how bad the riots got in LA over Rodney King?
    Valued items would vary depending on what the people were currently missing.

  4. What are we talking here? A Mad Max scenario come to life? Roving gangs, looting as they go? I certainly hope not.

    I don’t think we’re coming to that just yet (unless you live in LA or along the Mexican border). Give it a few more years and a couple more jihad attacks in the U.S.

    All the enemies of liberty, foreign and domsetic, are poised, ready, and in high spirits. Who knows? The Republican leadership is still busy playing games.

  5. I had a very similar conversation not *five* minutes ago here.

    I tend to favor US coin, as it’s made of something metal (at all) which has to be worth something at all, and is in small enough denominations to make a respectable trade, unlike trying to get a sandwich for a 1oz gold coin.

    I have a couple of other ideas but I’m not sure they’re such good ideas…

  6. I agree as to favoring US coin, especially 1964 and older 90% silver.

    Coin values here: http://www.coinflation.com

    A 1964 dime’s silver value is currently about 97 cents – there’s your candy bar.

    Most bullion dealers also trade in bags of 90% silver coin. The $1000 face value (715 troy oz Au) is the standard; you can usually get (face value) $500, $250, and $100 also.
    http://www.apmex.com is one dealer that I’ve used without any problems.

  7. A few months back, when metals prices were higher, a nickel was clocking in at about 7 cents and pennies were worth something like 1.4 cents or .9 cents, depending on whether they were the older copper ones or the new zinc jobs.

    Something I read recently was that whenever a country goes through hyperinflation at the end of it when things stabilize a bit, they always come out with new currency to replace the new. You trade in the old stuff for new paper at anywhere from 10:1 to who-know-how-high:1 so prices all go back to normal. When this happens, they only deal in currency, not coins. So, any coins you are hoarding will be worth that same multiple more than they were before the inflation.

    The real trick would be to buy silver or gold which will generally keep up with inflation, then sell it and buy coins right before they announce the money swap. You could end up a bazillionairre for almost nothing. Timing is the key, and being able to get that much coinage quickly. Banks tend to not want to give people very much coin these days.

    I used to think that casino stock would be a good thing to buy if they did a money swap since they have so much coin on hand, as well as being a good place to acquire large amounts of coin without anyone thinking you were weird. Feed $100 into the machine and then hit the payout button. Ka-ching, ka-ching, ka-ching and you’ve got lots of coins. However, it looks like they’ve all gone to coinless slot machines now. When they pay out, you just get a piece of paper that says how much money they owe you that you take to a machine that will spit out paper money and up to 99 cents in change.

    Oh, and I hear from people I know that smoke that cigarettes are somewhat perishable. Sure, addicts will take whatever they can get, but three year old smokes won’t have nearly as much barter value. At least vacuum seal them.

  8. We could always melt down zinc pennies into musket balls, thus increasing their value ; )

  9. You can cast regular bullets out of zinc. Just don’t crimp the case mouths. And keep separate pots and molds for lead.

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