One of the biggest concerns facing us today is the risk we collectively face of a collapse of the dollar. If the dollar were to suddenly lose its value on an international basis, our economy would crash, bringing financial hardship to pretty much everyone. We would see unemployment topping 25%, along with skyrocketing inflation making everything we need harder to get.
The thing that most people don’t realize is that our money isn’t really worth anything. I know we tend to say that in a joking sort of way, referring to how much the dollar has devalued due to inflation, but that’s not what I’m talking about.
What I mean is that the dollar is no longer backed by gold or silver; the only thing that gives it value at all is that everyone believes that it has value.
How The War Affected The Dollar
The dollar isn’t alone in this. Pretty much all modern currencies work under the same system, with those other currencies values pegged against the dollar.
So, anything that affects the value of the dollar ends up affecting the value of all other currencies, around the world. We saw this in the 2009 crash.
Actually, the dollar is what is known as the world’s reserve currency. A lot of that has to do with World War II. At the end of that war, the only country which was left standing, financially speaking, was the United States.
We rebuilt Europe and Japan and to a large part, the aid we had given to the Soviet Union during the war, managed to keep them afloat as well. But there was no contest for the strongest currency, the dollar won, hands down.
As the world’s reserve currency, the dollar is the main medium of exchange for international business. This is especially true when it comes to petroleum, which is one of the biggest international commodities.
Countries amass dollars to pay their debts for petroleum and other goods, which helps keep the value of the dollar high, as compared to other currencies.
Many have been speculating for the last few years that the value of the dollar will crash. When it does, the world will switch over to some other reserve currency, leaving the United States to make do as best we can. High inflation will make that very difficult, bringing many industries to their knees.
People will deal with this hyperinflation by returning to barter as a system of trade. If the dollar can’t hold its value, it will make much more sense to trade common goods, which have a relatively stable understood value, rather than having to adjust prices every day to keep up with inflation. This is actually rather common in times of financial collapse, as people struggle to survive and feed their families, in the midst of financial hardship.
Bartering Can be Profitable
During World War II, the nations of occupied Europe had a healthy black market going on. This was basically a barter market, mostly in foodstuffs. The Germans were trying to take as much of the product of the occupied counties from the citizens of those countries.
They needed those goods to finance their war machine. Unfortunately, the people they were taking it from needed it as well.
People in the cities, would visit the country, “on holiday” to see “friends and relatives.” They would make the trip carrying a large suitcase, which rather than being filled with clothes would be filled with silver and jewelry.
Once out in the country, they would trade those items to the farmers for hams, cheeses, sausages, butter and other preserved meats.
This ended up being very profitable for the farmers. When the war ended and life returned to some semblance of normal, they were able to sell that silver and jewelry, making a sizeable profit on it.
Many farmers who had been poor became well off, due to that black market bartering.
The Types of Goods to Barter
Items that feed the vices of other folks can be good for bartering.
Bartering requires having something that will be valued by others. The idea is that you trade something that they perceive as being valuable for something that you perceive as valuable.
Ideally, the items being traded away will be items that their owner doesn’t feel are of value. That way, both parties walk out of the deal feeling like they made out well.
The key is to determine what sorts of goods will become valuable during an economic collapse. You have to realize, value in such a time is measured differently than it is in “normal” times.
Whereas we see gold as being much more valuable than salami, if we were starving to death, the gold wouldn’t keep us alive; but the salami could.
Value is always based upon the law of supply and demand. Basically, the more scarce an item is and the more people want it, the more valuable it becomes. So, when food is in short supply, food becomes much more valuable than normal.
That’s what happened in the occupied countries of Europe and that’s what we can expect to see happening during the upcoming financial collapse. Things that are common today will be difficult to come by.
If those things are needed for life, they will quickly become very valuable and stay valuable until they become commonplace once again.
Feed Their Vices
The most valuable items in a time of crisis aren’t actually the food and other things we need to survive. They are the things that people consume to cope with the situation; alcohol, cigarettes and drugs. Sales of these items always increase in times of financial recession, hardship and after a disaster.
Most people are used to using these substances on an ongoing basis. If you dig into why they are using them, a lot of it is to help them deal with stress.
They are dissatisfied with various things in their lives and drink or smoke to deal with it. This may be the only place where Maslow’s Hierarchy of Needs doesn’t apply, as many of these people will put their vices before the most basic necessities of life. This can play to your advantage, if you stockpile those items for use in bartering in a crisis.
- Alcohol – This is probably the number one trade good in any crisis situation. People will consume alcohol in any form, just as long as it will help them to get drunk. It will be more efficient for you to stockpile hard liquor, rather than beer or wine, as the higher alcoholic content means that you can provide more product per volume.
It is best to stockpile alcohol in smaller containers, as that will give you the most profit in trading. When trading with someone, they will see a bottle as a bottle.
In many cases, they’ll be willing to give almost as much for a pint bottle as they would for a fifth. The other option is to have large bottles, like gallons, with a way to decant the liquor and trade it.
- Cigarettes – There are countless millions of people in the country who are addicted to smoking. Once again, it’s a means for them to deal with the stress of their lives. But those cigarettes may be hard to find during a financial collapse, as there may be problems with distribution.
For years, cigarettes have been the “money” of prisons, with the prisoners trading them for favors and other items. They can be readily traded individually or in packs, based upon what you are trading them for.
Instead of cigarettes, which don’t store well over long periods of time, you may want to consider stockpiling raw tobacco and papers.
While not as elegant as factory rolled cigarettes, they will stay fresh longer. You could even buy a small cigarette roller, so that you could make your own “factory rolled” cigarettes.
- Condoms – While people don’t think of it as such, sex is commonly used for dealing with stress as well. Considering that an orgasm is the best muscle relaxant there is, that makes sense. Something like a financial collapse won’t keep people away from sex, although it might make them more cautious about pregnancy. That makes a great market for condoms.
- Drugs – While demand for drugs will increase, just like it does for alcohol, I would avoid this one if I were you. A financial collapse doesn’t mean a collapse of the government, so selling drugs will still be illegal and those who do it will still be prosecuted.
- Coffee – While it may not seem like it belongs in this category, there are more people who are addicted to their morning cup of coffee, than all the other addictions combined. Coffee will become extremely valuable, something that people will want to drink to comfort themselves and use for maintaining a feeling of normalcy in their lives.
Feed Their Bodies
After the items that feed their vices, the next most important thing to have on-hand for bartering is food to feed people’s bodies.
During the financial collapses in Argentina, Cyprus and Greece in recent years, availability of food has been the biggest problem for the average person. Bartering co-ops formed in Argentina, specifically for the purpose of bartering food items.
The food you will want to stockpile for bartering are basic food that will keep well, when stored for a prolonged period of time. Many of these will be the same foodstuffs that you are stockpiling for your own family’s use.
- Canned goods of all types; meats, vegetables and fruits
- Spaghetti sauce
- Peanut butter (a great comfort food for kids)
- Jelly (to go with the peanut butter)
- Beef and turkey jerky
- Cooking oil
- Baking flour (unground flour stores better for long periods of time, but requires that you have a mill to grind it)
- Powdered milk (nobody likes it, but it’s needed for baking)
- Powdered eggs (ditto for this one)
- Chocolate – for the chocolate lovers in the world, as well as women in menopause
As with the earlier mentioned items, you’ll either want to stockpile these in small packages or buy them in bulk and have a way of repackaging them into smaller containers.
The smaller containers make it easier for you to negotiate favorably than larger ones would do. Having products in larger containers may put you in the position of being pressured into making a deal that is not as good, simply because the other party doesn’t have as much as you want for the larger container.
Having products in larger containers may put you in the position of being pressured into making a deal that is not as good, simply because the other party doesn’t have as much as you want for the larger container.
Non-Food Items to Barter
While food may be the hottest trade goods out there, people will need a large amount of other goods as well. Common, everyday items may not be being manufactured or may not be as readily available as they are today. Stockpiling these items could nicely compliment your food stockpile.
- Batteries – especially AA and AAA, which are commonly used for a wide variety of things. Buy large packages and break them up to trade as individual units.
- Toilet paper – this could become the coin of the realm during a collapse, especially if it becomes hard to find. People might give a lot for a roll.
- Soap – while easy to make, few people know how to anymore. Soap is cheap and easy to trade.
- Toothpaste & toothbrushes – these common items could become hard to find.
- Matches and lighters – this will be especially important if electrical power becomes unreliable.
- Fuel – any sort of fuel will become valuable, whether gasoline for the car or wood for the fire. The biggest problem with most sorts of fuel will be in storing it.
In addition, just about anything you need to use to survive could become valuable. The problem is that you and I don’t really know how bad things will get during that time.
In all likelihood basic services will still continue, although they may become a bit unreliable. In that case, the food will be much more valuable than the other items. But if power is out in large areas, then batteries, candles and fuel could be in very high demand.
One thing you want to make sure that you do is to stockpile a variety of goods. Each situation is slightly different and we have no way of knowing for sure what there will be the most demand for. By stockpiling a variety of goods, you are most likely to end up having some items that are in high demand.
Some Basic Rules for Bartering
It’s important to remember that at least some of the people who you will be bartering with are going to feel desperate.
Since desperate people do desperate things, there is always a chance that they will decide to rob you, either killing you to get what you have or just trying to get away with stealing it. You have to be ready to defend yourself at all times.
You should have someone else with you whenever you are bartering with people, unless you know them well. Your assistant needs to be a distance away from you, but able to see everything that is going on. Their main purpose in being there is to help you defend yourself, if that becomes necessary. As such, they need to make sure that they are located in a place where they can offer support, without being in a position where someone can sneak up on them and render them harmless.
It would be best if you could conduct business away from your home, as well as away from wherever you are keeping your stockpile (if it’s not at home).
Often, parks and squares become impromptu markets in these types of cases, giving you an ideal place to do business. Be careful returning home from the market, checking to make sure that nobody is following you to find out where you live.
Don’t make a big show of what you have available for trade. You’re going to be much better off displaying a small amount of “merchandise” and acting as if that’s all you have. If you have a lot, it might make you too attractive a target for thieves.
While you definitely have the advantage in the situation, be careful about pressing that advantage. The best barter deals are those where both parties feel as if they won. If you press your advantage too much, you may get more, but you may make an angry customer in the process. This could lead to future violence; at a minimum, it will make that person try to avoid doing business with you in the future.
It will be up to you to determine the value of the items that you have available for trade. That will be constantly shifting, as supplies become available and then are bought up. It is likely that some standards of value will arise in your community.
Use them as a guideline. Remember that the food and other supplies that you have will help keep your customers alive, which gives it a high value; but only as long as it is rare. The items they have for trade may be valuable in normal times, but are not so valuable during the crisis, due to their inability to help sustain life.