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View Full Version : Silver coins aren't enough


randallhilton
10-20-2011, 03:49 PM
Many of us are accumulating gold and especially "junk" silver coins in the event that the U.S. economy finally succumbs to gravity. I believe these to be very valuable for the purpose of stabilizing and rebuilding the economy but I'm concerned that they're not very practical.

For example: In 1964, at the end of silver coinage, the quantity of coins in circulation was more or less stipulated by the expected number of transactions being made by a population of fewer than 200 million. Without a doubt, the quantity of those coins has been drastically diminished.

Today, over 121 million souls have been added to the roster, presumably increasing the number of expected transactions by 60% or so. In other words, I don't see how we have enough coins in circulation to sustain commerce.

I'm not arguing the value of the coinage. Silver coins may be worth 15, 20 or even 100 times face value. That's a given. But if a person wants to buy something worth 3 cents silver how does one make change from a silver dime?

Gold is even more problematic since it will be worth far more and doesn't have any small denominations.

We will inevitably end up with a banking system but I'm trying to noodle through what will take place during the transition. Your thoughts?

cuppajoe
10-21-2011, 12:59 AM
Many of us are accumulating gold and especially "junk" silver coins in the event that the U.S. economy finally succumbs to gravity. I believe these to be very valuable for the purpose of stabilizing and rebuilding the economy but I'm concerned that they're not very practical.

For example: In 1964, at the end of silver coinage, the quantity of coins in circulation was more or less stipulated by the expected number of transactions being made by a population of fewer than 200 million. Without a doubt, the quantity of those coins has been drastically diminished.

Today, over 121 million souls have been added to the roster, presumably increasing the number of expected transactions by 60% or so. In other words, I don't see how we have enough coins in circulation to sustain commerce.

I'm not arguing the value of the coinage. Silver coins may be worth 15, 20 or even 100 times face value. That's a given. But if a person wants to buy something worth 3 cents silver how does one make change from a silver dime?

Gold is even more problematic since it will be worth far more and doesn't have any small denominations.

We will inevitably end up with a banking system but I'm trying to noodle through what will take place during the transition. Your thoughts?

I thought of that also....they sell 1 oz to 1/10th oz increments....only solution would be to have hammer, chisel, and a scale

TSJ
10-21-2011, 05:35 AM
"We will inevitably end up with a banking system but I'm trying to noodle through what will take place during the transition.........?"

The way they did it back in the old days, barter and IOUs.

grumble
10-21-2011, 03:50 PM
"But if a person wants to buy something worth 3 cents silver how does one make change from a silver dime?"

One nickel-based nickle and two copper pennies?

randallhilton
10-24-2011, 12:01 PM
"But if a person wants to buy something worth 3 cents silver how does one make change from a silver dime?"

One nickel-based nickle and two copper pennies?

We can test this idea:

If I send you a roll of copper pennies will you send me 2 silver quarters? :sarcastic:

MichaelK
12-07-2011, 01:08 PM
Good points. I'd like to suggest two reasons why silver and gold will still be important. Even a small coin can still be divided into smaller peices. The ancient Spanish "peice of eight" was one such coin, designed to be easily be broken into eight smaller peices for small transactions. We can still do that today, buying goods by weight of the metal rather than by coin.

Secondly, in the event that the economy crashes to the point that only silver and gold have value, there may be already so many dead at that point that per capital supplies may be sufficient. That is, the survivors will have enough because there will be fewer of us.

I fear the day that my silver and gold will be important. However, I also fear needing my car's safety belt or my boat's life preserver! But, that's what they're there for.

macgeoghagen
12-07-2011, 10:30 PM
It may come to pass that other metals will be used as mediums of exchange as well. Some possibilities:
1. copper wire. It is portable, valuable, and divisible. it is also useful. It is easy enough to measure off a length of wire from a spool, cut it and weigh it to ensure the buyer and seller that they aren't getting cheated.

2. lead. anyone who shoots or reloads will want some eventually.

3. steel. the vikings used steel bars as money during the iron age. If we get to a point when the steel mills stop functioning steel will become a high priced commodity.

patience
12-08-2011, 12:34 AM
I expect some of the above trading ideas will come to pass one day, at least in the more remote areas and probably everywhere for a time. But I think that some form of "money" will still be issued by central banks or governments. They do NOT give up easily. The one who issues money is the entity that is in control, and control is what they want, so money will be around, IMHO.

The trick is to get from here to there, and preserve your savings, if any. For those with large amounts of wealth, this could be a real problem. Not so for poor folks like me. I just don't have that much to worry about. I can easily buy stock for my workshop that will be in real demand in a very down economy--steel, welding supplies, bolts, sheet metal, and other materials to fabricate repairs for home, farm, and garden stuff. This move will do it for me. Bolts will always be bolts, and there will be somebody who needs them to fix their stuff. The value of the bolt will not change, only the PRICE will vary, depending on what kind of "money" is being used to pay for it.

If the dollar is toast, then we will work out payment in some form or other. Typically, I need to buy firewood, beef, pork, grains and dairy products. I need enough of "cash" in some usable form to replace my shop supplies. If currency does not exist to enable commerce to continue, then I can't get welding rods, gas for the torch, nor materials. In that case, we are all in a HEAP of trouble. It may happen, but I don't expect currency chaos to last very long before Uncle Sugar steps in and does his thing with "money", issuing "new dollars" or whatever. See the recent history of Zimbabwe.

I do expect us to have some period of chaos, whether it be inflation, deflation, credit lockup, or whatever else. Maybe all of the above; I can't tell. Therefore, I have a bit of junk silver that I bought as a TRADE, in the sense of a stock market "trader". I expect to sell it well before the provebial SHTF. At least I hope I am successful at that, because I am dead sure that the govt will make every effort to tax, defraud, or otherwise steal anything they think they can get as our country goes to hell on high red wheels. After all, those in power are all about STAYING in power. That's what they do. They "bought" everyone's gold once before--then promptly devalued the money they used to buy it! An overnight robbery. I don't want to be in the way when the wounded snake goes to thrashing around. So, I will SELL the silver for "coin of the realm", since that is what will buy the goods I need to get along.

My long term investments will be in goods, not money of any sort. money is just a means to get goods. It is the goods that are necessary, not the money.

Making change is not a problem for me. The goods I own are easily divisible. Then, when things settle down again, I will use whatever money TPTB decree is needed to pay the taxes. I think we all will end up doing that.