Saturday, February 5, 2011

Silver coins as potential barter fodder

If very large chunks of [S] hit the fan, barter will likely be a common way of exchanging goods and materials, but there's no good way to determine the comparative value of a bag of potatoes and a yard of cloth.  A common denominator is often something like dollars, or silver coins, or something else of a widely-recognized, standardized value for exchanging goods of differing values. lists some reasons why silver coins are a good medium for barter:

1. Low counterfeit risk: small denomination = discourages counterfeiters
2. Recognition: government minted = high liquidity
3. Convenience: for bartering/trading 
4. Protection: from inflation & deflation
5. Safety: due to "pocket change" appearance. 

Even when the US government is no longer the driving force it once was, silver coins will probably still be recognizable tender for bartering.

There are also currently movements across the US to create local currencies; these are mostly intended to keep money in the community rather than supplant US dollars and cents.  They operate much like a coupon book, and are sold at a discount, except they are accepted at a number of businesses in lieu of cash.  The local money used to purchase them at local banks is kept in the community when businesses that accepted them exchange them for those same local dollars.

This works well for areas with small local businesses like bakeries or coffee shops or artisan shops or galleries, but I bet that the local phone or utility company prefers what they would refer to as 'real' money.