Letter Re: Will Junk Silver Be Accepted for Barter, Post-Collapse?

I have been reading your blog for quite some time now and I have a different outlook that I would like for you to comment on if you would be so kind. I have seen multiple references to pre-1965 coins being good for barter in a post-SHTF environment, but I do not follow this reasoning. I live in Dallas Texas, and frequently converse with other like minded people about survival preparation and the world climate and, until I told them about the high melt value of pre-1965 coins, they had no idea it was greater than the face value. It should not have struck me as odd as I myself had no idea of this before I began reading your blog. These are well informed people, so it made me wonder how common this knowledge was. I began asking various people about this, and not one person had any idea that these coins had a higher silver value than their face value. Here is my perspective on this subject.

In a post SHTF environment some people will have prepared and some won’t. However, regardless of this, when it comes time to trade with others the universal doctrines will apply. 1. You will have to have something that I want for me to trade you what you want. 2. A think worth what someone is willing to pay for it, not it’s asking price. Now, if the vast majority of people have no idea that pre-1965 coins are almost the same as silver, most of them will likely have no desire for them at all, or worse, think that you are trying to scam them by pushing a trade with a currency which is likely defunct. Further, due to the probable lack of access to information, it is unlikely that people would be able to research the claim that these coins are worth more than their face value. Thereby keeping the populace at large ignorant of their true commodity value, and keeping the coins out of the trading markets.

I believe that the only scenario in which pre-1965 coins could come to be regarded as a barter good would be if people that already knew of their value agreed to take them in as trade for something that the ignorant populace already believed had value, such as ammunition or food. Again, however, there is a very small percentage of the populace that has knowledge of the melt value of pre-1965 coins, much less has a stockpile of them to use after the SHTF. Therefore, I believe it to be unlikely that there would be enough people, in enough varied locations, willing to make a sufficient number of trades of their items for coins for the trend of pre-1965 coinage as a barter good to become ubiquitous in the “villages” or “trading posts”. Due to these perspectives, I find it to be unlike that the new “villages” or “trading posts”, that spring up out of the ashes of our previous society, will use pre-1965 coins as even an uncommon trading good.

Most of the idea behind amassing coins for preparedness I believe to be tied to the value of silver, and the above illustrations assume that silver will be valued after the crash. However, after the crash I do not find it likely that silver will have any value at all for the the majority of the people. Very few people will be so well -prepared that they will have enough that they can concern themselves with amassing hard wealth for when society returns. I am certain that the majority will be trying to just survive as best they can. While there will be a Rolex or a diamond ring traded for a few tins of tuna, this will likely be an uncommon occurrence as society continues to devolve. Few people will have so much that they can trade away usable resources for hard value items in mass. While people may have the memory that silver used to be valuable, after having spent some time circling the drain with the rest of society, it is unlikely that they will have found a use for it since it can neither be used to defend nor feed one’s self. It is more likely that a wealthy man will be one that has enough food, warmth, defense, and shelter to survive indefinitely. That only leave silver coins as an easily identifiable currency.

So, let us suppose that there are places that have almost gotten back to some sense of civilizations, such as the “villages” or “trading posts”. As such they will likely want to use some form of currency. However, as we look to the past to inform the future, it is more likely that each community, or group of communities, will develop their own individual currencies in an effort to avoid counterfeiting and theft. Historically, in the absence of a centralized government, individual communities do what they feel they must to survive and to insure that they function as smoothly as possible. This is likely to focus more on food and defence, items that provide life stability, than it is on amassing hard value items.

In order for silver coins to have a value a person needs to want them from you more than they want to keep what you want from them. I can not see any functionally use for silver after the crash. I know that there are a great many very intelligent people that firmly believe that these coins will have a high value post SHTF, so I feel like I must be missing something. I would be most appreciative if you would share your views on the reasoning that I have outlined. I am very hesitant to invest in pre-1965 coins as a future barter good until I am convinced that it is a better investment than just using the same money to buy more food, guns, or ammunition. The ideal of having a compact, universal, and non-degrading barter good available when the time comes is very appealing, I’m just not sure that it is silver coins. – Russell from Dallas

JWR Replies: I stand by my prediction that in the event of a currency collapse, pre-1965 junk silver will very quickly become adopted as a de facto barter currency. Many people may not presently be familiar with these coins, but once the US Dollar’s value disintegrates, people will wise up to what constitutes real money, very rapidly. Adaptability is in the nature of free markets. It won’t take more than a couple of months for prices to stabilize in the new reality of silver coins, packs of cigarettes, boxes of .22 cartridges, and gallons of gasoline–in barter. I predict that within a month, the sound of ringing silver coins will become familiar–starting first at “mom and pop” stores and at farmer’s markets. These coins will be eagerly sought in barter, because they encapsulate all of the key attributes of a genuine tangible currency: recognizability, scarcity, durability, portability, fungibility, and divisibility. Being 90% silver, they also have useful industrial value. No barter currency is perfect, but pre-1965 coins come very close, at least for use here in the United States.