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Questions about trade and gold during financial & economic collapse. Any help? (self.preppers)

ThemApples007 が 投稿

Say the financial system collapses:

US Government Debt-> Printing -> Shaky Foreign Relations -> World War III -> Dollar Crash -> Financial Collapse

Common people need food/supplies to survive, so local black markets spring up everywhere. It seems guns, food, gas and gold/silver are king. At these black markets, a common transaction involves a high level of security, where both people typically arrive with a pistol on their hip, as well as a facilitator that (essentially like a deputy/policy) makes sure nobody tries anything funny. Poor people sell their labor, rich people sell their resources and lease their assets.

Say in one particular transaction, one guy (Bob) brings an ounce of silver and the other guy (James) brings a gallon of gas, a chicken and homemade loaf of bread. Bob knows he's getting usable items...gas to haul firewood for the cold winter, a chicken that will lay eggs and some bread to eat. James is excited to get something of lasting value - he can use the silver as a "storage of value" for the long term. Now James not only has his chickens, bread making equipment and gas storage supply, he also has silver as a safety net. Both sides win because both sides were prepared and have items of value to trade. Another guy (Stan) only has paper dollars which nobody will take, so he's forced to sell his labor at deeply discounted rates (sucks, you didn't prepare, bro).

Questions:

  1. How will Bobs silver value be determined? How will "rates" be published? What's to say Bob doesn't deserve an additional load of bread for his ounce of silver?

  2. Same question with gas and everything else. If a financial crisis ensues, how will we determine what anything is worth without having a standard to gauge value against. Put another way, say dollars don't exist...what will a chicken be worth? I get that "the market" will determine what everything is worth, but that will certainly lead to some awful decision making, right? Desperate people will sell everything just o stay alive.

  3. How did people solve this issue during the depression (or other points in history, like Rome, Germany, etc)...? How did markets work when the financial system was broken? Who oversaw transactions (like a police?) and how did people ensure they weren't robbed on their way to/from the trading posts?

  4. I was thinking about compiling some data on common historical market rates for commodities and items (as a reference, if needed). Does this exist yet (in a helpful way for preppers)...? Basically, I would create a table of everything in dollar terms. For example, 1 chicken = $10. 1 loaf/bread = $1, therefore we can conclude that 1 chicken = 10 loafs of bread. For certain items such as gas, I think premiums will rise considerably. IE, instead of the price being $2/gallon, it'll go up to $15/gallon...but if the dollar has collapsed, it'll be even harder to determine.

  5. How much "goodwill" is expected in each trade? Some people will obviously offer fair exchanges and pricing, while others will charge exorbitant rates..."I own all the gas in town, you must pay whatever I say". This is essentially a monopoly, so how will towns deal with people like this? On the one hand, they were smart enough to prepare, but on the other hand, they're abusing their power over trade. I personally believe in helping ones self first to become stable, then helping others as much as possible.

Lastly, does anyone have some good stories of people that thrived during bad economic times because the prepared?

I would love to hear your thoughts. Thanks!

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[–]Astroloan 7ポイント8ポイント  (0子コメント)

Congratulations. You've just discovered Economics.

But (less sardonically), your questions have so many loaded assumptions and unstated variables that they are not able to be answered. You'll have to take an aspect and refine your question before it can be tackled, and this is not going to be the proper place to get the answer you want.

[–]cosmicosmo4 4ポイント5ポイント  (1子コメント)

Nobody can possibly speculate about any of this. Even the assumptions of your post are science fiction.

[–]ThemApples007[S] -1ポイント0ポイント  (0子コメント)

Yeah, I'm aware - I mean, everything about prepping is science fiction until it happens. Regardless of what happens, prepping is generally best when all outcomes are considered (IMO anyway).

[–]Tryptoman23 2ポイント3ポイント  (0子コメント)

Know that this is all just my economic opinion 1: There won't be any "published prices" so its essentially what happens during the process of the barter. If the guy with the silver values his silver more than what the trade is for, he will bargain for that extra loaf of bread. However if he has no use for the silver and feels he is getting a decent deal and this guy is willing to take his silver for these goods than he won't push his limits and take the deal. 2: People will guaranteed trade items for very low prices to stay alive. During this economic collapse ya gotta realize that something is only worth what someone is willing to pay. So you determine the value of something. If a guy wants to buy something from you and you don't feel like its worth that little you just disagree and the barter continues until a price is met where there is a mutual gain amongst both of you.
3/4: don't know history off the top of my head 5: depends on individual Just my 2 cents

[–]The_Superbus 2ポイント3ポイント  (0子コメント)

I am going to try to answer the question that I think that you are trying to ask, but to do so I will have to make some assumptions.

I am assuming that you want to know what will happen during a period of hyperinflation which is caused by ongoing unrest. Under this scenario, US currency is rendered "worthless" due to overprinting (in order to continue fighting whatever unrest is occurring) and/or the erosion of consumer confidence in the currency due a belief that the government will not remain solvent and able to back it. Rapidly rising prices and movement of money will result.

In this situation, people will seek out more stable means of storing their wealth, such as in tangible assets (the gas and guns you mentioned), precious metals (gold or silver), or foreign currencies. Foreign currency is more likely today, and has been seen in actual hyperinflation events like Zimbabwe. I know that if I began to lose faith in the US dollar, I would be dumping my reserves into Euros or Sterling instead of buying up gold at heavily inflated panic prices. Of course that changes if the entire world economy falls apart at the same time, but that is unlikely. Hyperinflation occurs when one currency is devalued against others, which wouldn't happen in a global collapse. If everyone starts randomly printing money, then all currency is equally devalued against each other, and will therefore retain its value (albeit with the addition of more zeroes).

An economy such as this can function day-to-day fairly easily. If bread costs $15,000, and the dollar exchanges at 1€ to $10,000 that day, then you accept the €1.50 I give you for the bread. This is an easy form of exchange, and it is how it was done in Zimbabwe with the South African Rand. As soon as I earn dollars, I change them to Euros to hedge against future depreciation.

Once the economy is fixed and confidence is restored, people exchange back into US dollars and life goes on.

That's how it has functioned (in a really simplistic fashion at least) in the past. If you look into cases like Zimbabwe in more detail, you'll get a much better idea of how it works for real people.

[–]Irishlefty9 1ポイント2ポイント  (1子コメント)

I'm not educated enough on the subject of precious metals to form an opinion one way or another, so I'm curious. What are the chances that the guy with the useable goods decides he can't eat silver and so won't take it in trade? Would that be a potential problem or is silver safely established as a means of stored wealth that nobody would question its worth?

[–]ThemApples007[S] 0ポイント1ポイント  (0子コメント)

Well, I think ideally everyone would have their own resources to pull from, but silver/gold would be a good alternative to cash. It's hard to determine what people would accept as "payment"... I mean think, right now we put imaginary numbers in plastic cards and call that money. In a SHTF scenario, at least a coin is something you can hold in your hand.

[–]J973 1ポイント2ポイント  (1子コメント)

So, instead of hoarding gold/silver, wouldn't it make sense just to buy the things you need to become self sufficient? Like a farm, cows, chickens, heritage seeds, and a good canner/pressure canner?

[–]ThemApples007[S] 1ポイント2ポイント  (0子コメント)

Yes, that would be ideal but it's highly unlikely for everyone to have everything they need to survive all the time. When there's a surplus of wheat, it's much easier to sell that extra wheat for silver, then use that silver to cover costs from the next bad harvest.

I view precious metals very much as a tool to fill in gaps and create convenience...especially after a collapse of paper money.

[–]ugly_monsters 1ポイント2ポイント  (0子コメント)

If it would come to bartering involving non essential items such as silver then you would already be a long way in on a complete collapse. At this time there will be dead bodies everywhere and some civilization would be resurfacing. For what I imagine would be many years, people will not give two shits about silver. It's hard to comprehend but I imagine your view of this is kind of like the Old West.

By the time we would get to the point of trading for money again I think there would be some form of governing that will help determine the value of your precious metals. Once that is established it will be all about manipulative haggling. If you want a little more for your silver you have to convince James that silver will go up in value.

It's hard to even imagine what things would be like during a situation like that, though I do try to think about this as a worst case situation. I see it more like Germany in WWII (which I am no expert). I believe they went through 3 or 4 different types of currency in a decade or two. You could either be stuck with all of your money being worthless after 5 years or you can have silver and buy the soon-to-be worthless currency as you need it.

[–]Hybrazil 0ポイント1ポイント  (0子コメント)

This is far too hypothetical and detailed to answer without much speculation and a considerable time commitment. All I can say: "Results will vary"

[–]bardwick 0ポイント1ポイント  (0子コメント)

If it's a full blown collapse, precious metals won't be worth anything.

Maybe later as things start to normalize.

However, having enough in precious metals to pay property taxes (how most people lost their homes/farms during the Great Depression), is a good idea.

You can always get a secured loan from the bank using it as collateral. Even if you can't pay it back, you keep your property, just lose your PMs.

[–]TheRealDudeMitch 0ポイント1ポイント  (1子コメント)

I'm no economic expert, but in a true long term SHTF scenario, I think water, ammunition, food, and toilet paper will be way more valuable than any shiny metal.

[–]ThemApples007[S] 0ポイント1ポイント  (0子コメント)

Yes, certainly with you there.