What to use as money?

[Burke]

I'm reading Jim Rogers' new book_Street Smarts_. He states that we don't need to return to a gold standard because politicians would just find a way to get around it. He writes:

"The only solution that would work, in my opinion, would be to let individuals decide for themselves what to use for currency. If you and I, when we enter into a contract, want to use seashells as a medium of exchange, then we can use seashells, and so can everybody else. If you and I want to use sugar to settle our affairs, fine. In that way the market would determine what money is. Politicians would have no control over it. If the money were to be debased, people would simply stop using it. The world would stand on a sounder footing."

I agree with this completely.

Why should the govt be dictating to us how we trade and what individuals can choose to use as money?

[wgbgator]

You can already do that. I mean, you can offer to mow your neighbors lawn in exchange for something else of equal negotiated value (a stack of firewood) instead of dollar bills.

[tegator80]

The greatest currency in the apocalyptic scenario is...common sense and street smarts. Everything else is guessing.

I would also think that bartering is the effective black market enterprise that will take off. But that has to be pretty much regional and so best for communities that are pretty diverse and independent minded already and probably have limited needs/desires.

[Burke]

Wgb,

If he doesn't pay you and you have to sue him, you cannot (ordinarily) get specific performance, here, payment with firewood. You must pursue a "remedy at law" and get a money judgment, which, by law, is payable in dollars.

Essentially, the govt forces you to use its money by not (ordinarily) enforcing obligations that are payable in other ways.

[wgbgator]

Originally Posted by Burke

Wgb,

If he doesn't pay you and you have to sue him, you cannot (ordinarily) get specific performance, here, payment with firewood. You must pursue a "remedy at law" and get a money judgment, which, by law, is payable in dollars.

Essentially, the govt forces you to use its money by not (ordinarily) enforcing obligations that are payable in other ways.

And your example just unwittingly explained why a single currency is a good idea, not a bad one. Just like it would be stupid to be able to pay taxes or licensing fees in chickens or salt. Or having to pay a legal judgment in something of value of the winner's choosing (a life time supply of toilet paper instead of $4000). Is this a form of "freedom" anyone would find beneficial?

[ufhomerj31]

Booze?

[Burke]

The judicial system exists for our benefit, not the other way around. The notion that it could function only with fiat money or govt mandated money is ridiculous.

As a practical matter, people would gravitate to gold and silver, as they always have when not forced to do otherwise.

[wgbgator]

Originally Posted by Burke

The judicial system exists for our benefit, not the other way around. The notion that it could function only with fiat money or govt mandated money is ridiculous.

As a practical matter, people would gravitate to gold and silver, as they always have when not forced to do otherwise.

This is false. People have circulated lots of things as mediums of exchange (shells, beads, etc), not just shiny metals.

[tegator80]

What makes gold and silver a natural money vehicle is because it has industrial value outside it's being pretty or covetous nature. Diamonds are just as intrinsic, if not more so. The problem of diamonds is that there are two very different types: those that are pretty and rare and those that are undistinguished and industrially focused. Can't really assume there is a homogenized commodities market for them.

I would also argue that any money vehicle, whether it is a government or the people, can not be easily manipulated due to supply. If, say, gold goes to $10k per ounce because everyone thinks it is worth it in the marketplace, someone industrious would then begin to find mines that are unprofitable at the lower levels and try to make a killing at the higher ones. I believe that is why we went off the gold standard: that the mining of the metal was not necessarily a direct reflection of the wealth of the country. It hampered the world economy.

[busigator96]

I know it cannot be done now because of the attitudes of the people in the west....why not switch to a resource based economy and eliminate money?

Right now everything is about money, or strongly tied to money. Where is community, sharing, and love for the people all around us? The whole competitive nature is born from our sense of scarcity. Currently, the caring capacity of the earth is 9 billion people. Why are there people starving at such a high rate today?

Under the international banking cartel that exists today we are almost all wage slaves and 75% of our jobs are obscelete.

[Burke]

Q. Why not just let people trade the way they want to?

A. Because politicians and their friends could not rob them blind by creating money for themselves whenever they chose to.

Simple as that.

[Juggernautz]

I used cigs & booze in Turkey to purchase tapestries & other collectable goodies when stationed there.


More valuable than our currency!

[CHFG8R]

Originally Posted by wgbgator

You can already do that. I mean, you can offer to mow your neighbors lawn in exchange for something else of equal negotiated value (a stack of firewood) instead of dollar bills.

I had a client about a year ago who was actually doing this. They create the currency, which can be used within the network of those willing to trade in it.

No, we did not end up doing business with them.

[wgbgator]

Originally Posted by CHFG8R

I had a client about a year ago who was actually doing this. They create the currency, which can be used within the network of those willing to trade in it.

No, we did not end up doing business with them.

Something like that seems good in a one-off scenario. I need x, so I'll do x. In an ongoing relationship, it makes sense to circulate or use currency/IOUs rather than find something tangible to exchange equally everytime.

[tegator80]

Originally Posted by CHFG8R

I had a client about a year ago who was actually doing this. They create the currency, which can be used within the network of those willing to trade in it.

No, we did not end up doing business with them.

Bartering works well, as long as the two of you have mutual interests. Where there are conflicts then bartering becomes complicated: you carry value in something until someone comes along wanting what you don't.

But the cynic in me says that the best reason for having money is that...the government can regulate it, track people's behavior with it, and use it as a taxing medium (tax the transfer of assets). That is why I originally posted that in an apocalyptic scenario bartering becomes more viable. You can hide from the government easier.

[Burke]

Money is the lubricant of any economy. Barter works only when you can find a trader with needs that correspond to yours, traders who need what you have to trade and have what you need and are willing to trade it.

Money is also a store of value. If you grow a crop of perishables like tomatoes, you can trade them for money that doesn't rot Ina few days.

[tegator80]

Originally Posted by tegator80

Bartering works well, as long as the two of you have mutual interests. Where there are conflicts then bartering becomes complicated: you carry value in something until someone comes along wanting what you don't.

But the cynic in me says that the best reason for having money is that...the government can regulate it, track people's behavior with it, and use it as a taxing medium (tax the transfer of assets). That is why I originally posted that in an apocalyptic scenario bartering becomes more viable. You can hide from the government easier.

See, I was right:

http://www.usatoday.com/story/news/w...ering/1894365/

[chemgator]

They estimate that about 10-15% of the U.S. economy is "under the table". Paid in cash with no gov't knowledge or ability to collect taxes. Obviously, this works better with small transactions, but is still possible with larger ones. The banks start paying attention when you make cash deposits or withdrawals exceeding $10k or so, but you don't have to use the banks.

Some people volunteer at private schools where their children attend, and no money ever changes hands.

[HALLGATOR]

Food. Because it will sustain you and your family better than anything else. You can have a truck load of precious metals and still starve to death.

[HALLGATOR]

In addition some of the things we take for granted daily would be good to barter with in tough times.