You need to stock up on barter items
Posted by John T. Reed on
I think those of us who are concerned about hyperinflation need to start building up a supply of BARTER items.
There is a chapter on what the best ones are in my How to Protect Your Life Savings from Hyperinflation & Depression.
It is NOT what many think. Bullets, for example, suck. For one thing, a ton of people already bought thousands of them. For another, there is too much variety in the guns owned and the type of bullets needed for each. For another, there seems to be a bias in favor of bullets still in the original box from the manufacturer and against self-loaded bullets which are somewhat dangerous.
Gold also sucks. It has been way overpriced since around 2005. And it comes to denominations that are too high for a market that gives no change. A one-ounce coin now is worth about $2,000. How do you get your money’s worth in a market that gives no change?
Nickels and pennies great but hard to get
Nickels and pennies are great, except you have not been able to buy them for about six months. Junk silver is great but it has been overpriced since March.
Not high-denomination stuff
In Austria in the great hyperinflation of the early 1920s, people with friends in Vienna and in the country noticed that art work, silverware, and pianos disappeared from the homes of their city friends and appeared in the homes of their country friends. Why? They had been bartered to farmers for food. Again, these are high-denomination items and the barter market does not give change. A grand piano can cost $5,000 to $85,000 and they probably got $500 worth of food for it from a farmer with no piano players in his family.
The correct denomination is what you have in your pocket: $1, $5, $10, $20.
Stuff that gets used up every day
The best things are those people use up every day or specie coins. Use every day would be hygiene products like toothpaste, disposable razors, food, detergent, toilet paper. Specie coins are those that are roughly worth their weight in the commodity they are made of like pennies and nickels but not gold because of its too high denominations.
No assay required
You need to avoid items that need to be assayed. That is true of all gold coins. It is also true of metal ingots. For example, nickel coins are now hard to buy so how about buying nickel ingots? No good. They have to be assayed to confirm they are nickel. In contrast, copper, nickel and pre-1965 silver US coins (dimes, quarters, half dollars) can be trusted to be what they claim without assay.
Things you will use yourself
Buy things you will use yourself if you do not need to barter them. That eliminate the risk or betting aspect of so many supposedly hedges against inflation like gold. If you stock up on gold and we do not get hyperinflation, it will fall in value. If you stock up on.
Example of items that are NOT used every day and are therefore lousy barter items are bullets, tools, nails, motor oil.
If you are a retail merchant, and your inventory is not high priced, you can use that to barter.
Fuel is used every day, but hard to store safely and hard to guard in a crisis.
Water is used every day but even in past hyperinflations municipal water seemed to flow pretty normally.
When I was a kid in the 1950s, you could often pay for direct mail purchase entirely with stamps. Forever stamps are the only ones you would do this with because they are not dollar denominated. They are my new nickels. Buy them from Costco at a discount.
Do NOT buy a stamp with a $ or ¢ amount on it. Those will be as worthless as paper dollars in hyperinflation. I am assuming the USPS will not renege on the promise made by forever stamps, but there is no financial crisis history of them. In a financial crisis, I would spend those first.
In theory, things that people are ADDICTED to might be good barter items, like tobacco, alcohol, recreational drugs. But I wave you away from them. Generally, you need a license to sell them or even to possess large quantities of them. And you do not want to be dealing with addicts or going where addicts hang out. That which they provide to you for the item is likely to be stolen, the receipt of which is also illegal.
Durability is another key. People eat bread daily, but you cannot store it.
‘We buy _______’
You often see signs saying “We buy _______________.” That which they buy would be good parter items, but mostly what they buy is gold, which is no good because of currently being overpriced.
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