The best currency in a crisis is NOT gold, but…
Gold prices are surging, and reached a peak of all times, greater increase than after the September 11 crisis, have a look at the data:
People are buying gold due to the pandemic and political instability, as they believe that it could be used as an alternative currency, in case the monetary system collapsed. However, I don’t think it is a good idea, and I think there is a really good alternative, especially if you live in New Zealand (or Europe, or the US).
Gold wouldn’t be a good currency for trading between people, due to several reasons: say you have chickens and someone wanted to buy chicken eggs from you. Imagine they come to you with a gold coin – first – a gold coin worth a lot of money – a 1/10 oz American Eagle gold coin is valued at $240US (more or less…) which is $360NZ, this is a lot of chickens eggs! But regardless of the value, how could you know that the gold coin is real gold and not faked?
But my main issue with gold coins is that in a time of a crisis, gold is fairly useless: you can’t eat it, you can’t fertilize your garden with it, it is basically a commodity that is fairly useless in such circumstances (of a crisis).
I have a better idea. My suggestion will be much better, because of the following characteristics:
- It is easy to carry, like coins
- It has multiple value options, not just one, i.e. “main currency” for trading and a “small” currency for change
- Its values per item are modest – between 10 cents to $4
- and… believe it or not – it has a use: it can produce the owner lots of food!
- and last but not least…. it has some technology and metals related to it. This is, I believe, an important characteristic of a good currency – you don’t want it to be producible just by anyone, or to be found on trees in the forest – otherwise – its value will diminish. You want the currency to have some intellect and technology in the making – since knowledge and technology are the most valuable commodity on this planet (even that we think that “money” and “gold” have value, they reflect the fact that things could be made out of it and makings of things requires knowledge).
Can you guess which currency I’m referring to? Here is a picture of it:
Bingo! Bullets – ammunition – is probably the best currency I could think of! It is made of metals and some other chemicals – so it is not easily made at home (=value). It has some tech in its production process. It has a very important use – especially for hunters which can turn a $3 bullet into food for weeks – but also for farmers! … it is easy to carry around bullets, and as I mentioned above -different types of ammunition have values similar to our trading coins, you could use for instance:
0.44 Magnum is around $1 value
And bullets like for 270 rifle have a value of between $3 to $4 per bullet.
0.22 LR as 10 to 20 cents value, could be used for small change.
So back to my chicken eggs example, say you wanted to buy 20 eggs from your neighbor farmer: they would happily accept 2 to 3 rounds for it, which are valued around $10. They could use it for hunting or home kill of cattle – so it has a use – or they could use it for trading with others, something which gold can’t really be used for. Also, carrying 3 bullets in your pocket is not as hard or risky as carrying a gold bullion, which you anyway wouldn’t want to swap for 20 eggs, would you?!
And last but not least – trust and reliability. Ammunition in most countries can be bought and stored only by people which hold a gun license, and those people are usually cleared by police. It means that the people trading with the “bullets currency” are non criminals, so they have a better chance to be reliable and trusty. Wouldn’t you agree that this point is making that currency even better – imagine that you knew in advance that the people you do business with – have got a police clearance… sounds like a safe business to me! note: don’t forget to check the gun license of people you handle with, this is ABC but crucially important.
I will leave you with this idea, some details below how to do it and with a hope that you keep well and safe during those hectic times 🙂
Eran
Some pragmatic ideas
Bullets have got one disadvantage to gold: they may expire after some time. So here are some additional ideas.
How much to store?
The best idea when it comes to storage of expiring goods is to store using the “FIFO” buffer concept in computer science = First In First Out. It means that the oldest ammunition you have will be used first.
Now you need to calculate how many bullets per caliber you tend to use for hunting and recreation in a month, and double it by 60 (5 years). For example, if you would use say 100 rounds of 0.22 a month taking down possums / rabbits and shooting for fun with your kids, it means that your “gold number” of 0.22 storage would be 3,600 bullets. Do the same calculation for each caliber you use.
How to store it?
- First and most important, don’t forget to comply with the gun law rules of your country, for instance, in some countries (Israel) you are required to lock ammunition in a safe – make sure you do so.
- Wrap the bullets in polyethylene (nylon) bags.
- Buy some silica, and put it in your ammunition box, it will prevent damp from destroying it.
- Write down on the bags the date you purchased it.
