Bartering- obsolete practice or future currency?

Who here knows what fiat currency is?

Fiat currency is money that derives its value from government regulation.  Fiat currency does not have its value tied in to the value of gold, silver or any other precious metal.  Fiat money is not worth the paper it is printed on once faith in the government issuing it has been lost.

Our U.S. dollar is now fiat currency.



Our dollar was once tied into the gold standard.  That is; the value of every dollar was backed up in gold bullion by the government of the United States of America to ensure that it would always have value.

In 1971, President Richard Nixon decided to terminate the United States involvement in the Bretton  Woods Agreement, thereby removing the U.S. dollar from the gold standard.  This reduced our national currency from being backed up with gold bullion to being backed up by a government promise.  Inflation never rose beyond normal levels when our currency was backed up by the value of gold reserves; since it went into fiat status, inflation has run rampant.

This isn't a discussion about inflation, however.....it is a discussion about fiat currency and what that means to you and me when times get tough.

You see, during normal operation of the economy the dollar holds value because people have trust in it and feel comfortable receiving it for the goods that they are selling.  Buyers and sellers both consider it to have value because it can get them the things that they want.

However, a crash in the economy, created by any number of reasons, can cause people to lose the faith they have in a fiat currency, causing it to become worthless.

Hyperinflation is one of the reasons people lose faith in their fiat currency.  Government impotence caused by a cataclysmic event can be another.

What this all boils down to is this:  If the shit hits the fan, the money in your bank account will not be worth anything.  People will have lost faith in it because it will not provide them with the goods and services they need in an emergency situation, and since the dollar is no longer backed up with gold, it will simply be considered paper with green ink on it.

Why won't the dollar provide them with the goods and services they need?

Because when the supermarket shelves are empty, the food trucks aren't running, gas stations are either dry or can't pump for lack of electricity, and our faucets no longer dispense water, the people who have these resources are not going to give them up for any amount of money.  You may want to give someone $1000 for a gallon of water,but they won't accept it because they know they cannot replace what they have.

So, now that our currency system is worthless, what do we have left?

The good old barter system!

You have stocked up on lots of food and water.  Your neighbor ran out of both after three days, but has a nice AR15 you would like to have.  Looks like a deal can be made to suit both parties....

The trick to coming out OK in a barter situation is to not be really hurting for anything in the first place.  If you are already hungry and thirsty, you will end up giving away half of what you own to get a little food and water.  The people who have prepared ahead of time will be the ones who control a bartering deal and come out ahead.

Some folks even stock up on "special" barter-able goods to further improve their situation.  Wine, whiskey, cigarettes and smokeless tobacco will command top value in trade once they are no longer available because we have a large number of folks still addicted to them, and who will give most anything to sustain their habit.

Ammunition will become extremely valuable, and will most likely become the new common currency when making a trade.  You did remember to stock up on it, didn't you?

The key for approaching a barter meeting is to have something of value with respect to survival.  That $3000 flat screen TV hanging in your living room and the BMW in your garage aren't going to be worth a bucket of rotten apples if the grid goes down.  But, if you show up with some canned goods, purified water, ammunition, OTC medications, first aid supplies, heirloom vegetable seeds, reloading supplies or candles you will be bound to strike a good deal for whatever you need.

If you bring an iPod to the table......well, let's just say that you're gonna be shit outta luck.

Also, commodities are not the only things traded during a barter.  Personal skills, trades and crafts can be traded for goods as well.  Sewing, canning, farming, gunsmithing, and mechanical repair are some good examples of skills, trades and crafts that can be traded for goods.  The more skills you know, the better off you will be.  The jack-of-all-trades kind of guy gets overlooked and under-compensated in today's economy compared to specialists, but those roles will be reversed in the event of a severe economic crash.

In a future article, we will discuss the stockpiling of silver and gold; two precious metals that will always hold value during uncertain economic times, and the details behind keeping them.

The next time you are working on your preps, or simply checking out a yard sale, give some serious thought on picking up items that are good for barter.  The items you buy for pennies now will be our dollars in the future.






LWM out...............