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How about developing a wider range of alternate "currencies?"

Started by Dave Ridley, April 06, 2007, 09:00 AM NHFT

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Dave Ridley

OK here is an idea.  What if we were to start blurring the line somewhat between barter and money?   What if we were, simply by accepting them, to turn more and more things into currency?   I think this could make each of our "dollars" go a bit further for reasons I'll get to in a minute.

Say for example five or six of us (maybe even one of us) were to start accepting wheat pennies, in lots, at their current trade value.  Two years ago this was apparently three cents per coin, now if e-bay is any indication it's around thirteen cents per coin.  That seems a  little shocking but anyway...

Say I am willing to accept wheat pennies at a thirteen cent valuation, for whatever it is you want to buy from me.  Well that means that you can now feel comfortable buying wheat pennies at eleven cents from your local coin shop, knowing you'll be able to make a slight profit the next time you buy something from me.  That being the case, you no longer need to take a hit for shipping or e-bay fees, or worry about how much of a cut the coin dealers will take when you re-sell. Assuming 5% ebay fees, 5% shipping cost and 5% coin dealer cut....that means wheat pennies now have 15% more value for you than for average people.  Factor in my thirteen cent valuation, and it's now clearly worth your while to have wheaties.

If you spend the coins soon you get the quick markup.  If the coins end up sitting around for a long time, they probably hold or gain value...unlike Fed notes.  Sure you can do this type of thing with precious metals but why not diversify?   Then you can perhaps choose to spend whichever acccepted currency is best or most profitible for you at that moment. 

The same benefits - and new ones - could apply to other types of "currency."  In times of physical crisis other things are used as money...matches, toilet paper, water filters.   But if they could be used in normal times as currency, then all of us would feel comfortable owning a lot more of them, right?  Because they would be liquid. And we'd have them in quantity the day the spit hit the fan.

For this reason, I think I would like to start accepting some of these kinds of things in lieu of currency and metals.  It's just a matter of setting a valuation. 

What kind of things would *you* like to be able to spend as though they were currency?
What kind of things would you accept as currency and at what valuation?
What kinds of problems would make this difficult to do, and how would they be overcome?
What other advantages or disadvantages do you see?

There is another interesting one I've just thought of...but one thing at a time.

Russell Kanning

I like the idea ... and use it a little. The gold and silver seem to work well because they don't spoil easily and you can carry them pretty easy.

error

I think that what becomes widely accepted as currency depends a lot on which particular shit hits which particular fan.

So having a wide range of alternatives to choose from is a very good idea.

It's even conceivable that circumstances could arise in which gold and silver will be much less valuable than one would ordinarily think. What people value will change when the shit hits the fan. We could all wind up using live chickens as money. Or blank DVD-R's. Or wool. Or ammunition.

Raineyrocks

Quote from: error on April 06, 2007, 09:49 AM NHFT
I think that what becomes widely accepted as currency depends a lot on which particular shit hits which particular fan.

So having a wide range of alternatives to choose from is a very good idea.

It's even conceivable that circumstances could arise in which gold and silver will be much less valuable than one would ordinarily think. What people value will change when the shit hits the fan. We could all wind up using live chickens as money. Or blank DVD-R's. Or wool. Or ammunition.

Or Hershey bars, toilet paper, pens, paper and stamps.

sandm000

Quote from: error on April 06, 2007, 09:49 AM NHFT
We could all wind up using live chickens as money. Or ammunition.
That'll be 2 Cocks and a Hen Ma'am.

And 2 eggs are your change.
Have a nice day.

Actually anything that anyone is willing to trade for could become currency. I would like to have a stockpile of cheap liquor and cigarettes.  I bet there are alot of people who would accept those as currency. (in a SHTF scenario)

MaineShark

Those of us who heat with oil could use biodiesel as heating fuel.  So, if someone wanted to install a biodiesel reactor, he could purchase vegetable oils from others, convert them to fuel, and then trade the fuel for goods and services.  Of course, maybe he needs a new boiler, so I install one for him in exchange for 3000 gallons of fuel.  Trouble is, I have no place to store 3000 gallons of oil, and he doesn't produce that much at one time.  So I agree to accept payments of 100 gallons a month for the next two-and-a-half years.

I think we just invented a bank... :)

Joe

Raineyrocks

Quote from: sandm000 on April 06, 2007, 10:16 AM NHFT
Quote from: error on April 06, 2007, 09:49 AM NHFT
We could all wind up using live chickens as money. Or ammunition.
That'll be 2 Cocks and a Hen Ma'am.

And 2 eggs are your change.
Have a nice day.

Actually anything that anyone is willing to trade for could become currency. I would like to have a stockpile of cheap liquor and cigarettes.  I bet there are alot of people who would accept those as currency. (in a SHTF scenario)

I think booze and cigarettes are a great idea too. :)

PowerPenguin

One thing to remember is that monetary units have to be preservable, so they can be stored for long periods of time, transportable, and easily denominated. This is why metals are used and not chickens. Unless you want poultry meat, you can't just hack half of a chicken off as change 8-).

MaineShark

Quote from: powerpenguin on April 06, 2007, 11:56 AM NHFTOne thing to remember is that monetary units have to be preservable, so they can be stored for long periods of time, transportable, and easily denominated. This is why metals are used and not chickens. Unless you want poultry meat, you can't just hack half of a chicken off as change 8-).

But the farmer down the road from me could issue me an IOU for eggs, which I could collect in increments of a dozen, as needed, over a set length of time, in repayment of a debt...

Joe

sandm000

Quote from: MaineShark on April 06, 2007, 12:06 PM NHFT
Quote from: powerpenguin on April 06, 2007, 11:56 AM NHFTOne thing to remember is that monetary units have to be preservable, so they can be stored for long periods of time, transportable, and easily denominated. This is why metals are used and not chickens. Unless you want poultry meat, you can't just hack half of a chicken off as change 8-).

But the farmer down the road from me could issue me an IOU for eggs, which I could collect in increments of a dozen, as needed, over a set length of time, in repayment of a debt...

Joe
I second that.

41mag

Quote from: error on April 06, 2007, 09:49 AM NHFT
We could all wind up using live chickens as money.
Reminds me of the musical The Best Little Whorehouse in Texas.

22LR seems like it would be a good commodity to hold.  Relatively inexpensive, widely used, and can be held for a while.

Insurgent

Cigarettes and liquor are phenomenal items for barter and exchange--there's always a demand, and they basically hold their value. Even in situations where the spit isn't hitting the fan, they can be used as items of exchange.

For example, I attended a Rainbow Gathering a few years ago and found that most of the folks selling their items accepted these as currency.

Insurgent

Yeah, it was pretty interesting. People-watching was fascinating, as the event draws people from the fringes of society There's a nice spirit of welcoming and tolerance from most people there. They're also a pretty strong anti-government sentiment exhibited, particularly towards the cops who are patrolling.

And on the topic of alternative currencies; bartering, trading and alternatives like cigarettes are widely used. Cash money is practically discouraged; you hardly ever see money trading hands.

Dave Ridley


So, we are all in agreement that certain things are valuable in the SHTF.    Thus, we need to find something that will motivate us and more people to have them.  That something is the secure knowledge that we'll be able to use SHTF posessions as currency, even if the S never hits the F.

Maybe all that is needed is for us to set a valuation for certain items and for a couple of us to accept those items as currency, in normal times, at that price.   That gives everyone who trades with us a motivation to buy those things in greater quantity.  It gives everyone the opportunity to posess a currency (other than precious metal) which holds or rises in value over time.  Some of those items are unlikely to depreciate and can be used, traded immediately, or traded at a profit later if the valuation goes up.   I assume we could reset the default valuation from time to time.  Meanwhile you've got them lying around for SHTF. 

But which items?   Every item has its pitfalls and advantages. 

Toilet paper is safe to store and easy to set values for, but it's bulky to trade in normal times .

Certain ammo calibers are probably easy to set a value for, but they are harder to store safely and how do you tell if a round of ammo has gone bad?

Coins are more liquid but have no intrinsic use in a physical disaster.

Matches are easy to set a value for, but they require storage precautions to prevent them from becoming a fire hazard.   They also probably are pretty bulky to trade and store in normal times.  They did become currency apparently during the Bosnian conflict.

Cigarrettes pack a decent value into a small space and weight, they're safe to store.  They're easy to value.  But there are moral issues, and I understand they get stale.  Refrigeration apparently helps.

Liquor seems hard to define a value for unless we used only a small numer of liquor types.  However it might be good to hold for the fact that it's nonperishable and subject to rising in value (regulation, taxation).  Would it be possible to settle on a small number of readily quantifiable liquor types?

Blank DVD-Rs are an interesting idea but I assume they depreciate because of deflation in the computer market.

The wool idea I don't even know enough about to speculate.

Paper sounds viable since it's so consumable.  It should be easy to set a value for and trade in packages or boxes.   Bulky tho.  Limited SHTF applications; I guess you would burn it.   Maybe packaged form it word burn slower than kindling.

How about chocolate?  How long does it keep? 

I think I favor matches and liquor but am not sure....

Dave Ridley

Looks like ebay prices for wheat pennies are way out of whack compared to coin stores.  You can get them intermittantly for 3.6 cents a piece in Nashua but as I mentioned earlier they seem to be selling for 13 cents each on ebay, and I'm just talking unsorted lots here.  Guess that provides a markup opportunity.   If you sell back to the coin store you'd apparently get about 2.5-3 cents.

Anyway as a first minor step I'm ready for now to start accepting wheat pennies as payment at a 3.8 cent valuation.  Who is willing to join me in doing the same?   I'll be looking to buy some and spend 'em on those who accept them.

And theoretically, this gives you the means to buy them elsewhere and use them on me at a profit.