If the power grid fails for a weekend, dollar bills will always be accepted. And I think it’s a good idea to keep at least $500 on hand in your home, in $5 and $10 denominations. If the stores are open, but their credit card machines are not working, you’ll still be fine.
But what happens if things really fall apart? It’s easy to imagine a time when cash will no longer be king.
What if an EMP knocks out all our electronic infrastructure? If you’ve read “One Second After,” you get a feel for how quickly all our technology can go away. And how useless cash would become almost immediately.
What if hyper-inflation destroys the value of those dollar bills you’ve tucked away? If we see the kind of inflation that they have today in Mozambique, or that they had in Weimar Germany, that $500 in cash won’t even buy you a breath mint.
What if a virus sweeps the country, and kills millions? Those who survive may have no interest in your paper dollars, preferring instead to have something they can use.
Suddenly, you may have no choice but to barter for what you need. But barter is terribly inefficient as a substitute for currency.
How often will the guy with goat you want, need the generator you have to trade? And how, exactly, will he make “change?” Most of the time, even when two people each have something the other needs, the two trades won’t be equal in value. That may well kill a deal.
And how will you buy small items, like a dozen eggs, or a pail of milk, without a good substitute for currency? You can’t trade a cow for some cheese.
Silver and gold may step in and function as a true replacement currency. Historically, people have looked to the precious metals when currencies or governments fail. So it makes sense to have plenty of Junk Silver coins tucked away.
But you can’t eat silver, or drink silver. And when you’re hungry or thirsty, it just may turn out that silver will be shunned just like dollars bills, with traders demanding something they can actually use.
I believe that, when dollars stop working, some new, useful items will begin to function as currency – a pseudo-currency, like cigarettes do in prison movies!
And if other items are going to become pseudo-currencies, it would make a great deal of sense to stock up on them now, while they are cheap and readily available.
So how can we determine what people may turn to as a substitute for currency, when the balloon goes up?
First, we need to consider just what makes a good item for trading, so that it can act effectively like a pseudo-currency. Simply put, it should be like money, but also useful itself.
So it should be small, compact, lightweight, durable, long-lasting, and fairly divisible, like currency. It can’t be fragile, or need care and upkeep.
It should also be so obviously useful, that someone will take it in trade even if they don’t need it immediately themselves, knowing they can use it, or easily trade it in the future.
And the genuine nature of the item must not be in doubt. (That’s one reason I favor junk silver over small bars. No one is faking 1958 quarters.) Such coins need to obviously be “the real thing.”
After looking over what I use regularly, what I have put away for a rainy day, and what I think others will also want and need, I’ve identified the following items as potential pseudo-currency:
32 count Strike-anywhere matchbooks. I bought 120 boxes for $20. on eBay. Just $.17 per box. Fire is life. The boxes themselves fit nicely in the pocket, and are lightweight. So handy and useful. It’s clear at first glance that they are genuine. For small trades, 2 or 3 individual matches may even be traded, if they are strike-anywhere matches. Otherwise, you’ll need the box for striking.
Cartridges. .22 LR is very inexpensive now, but eventually may be hard to get. I just bought a bunch of 50 round boxes, for $1.65 each, at Dunham Sports. That’s just 3.4 cents per cartridge. They should be highly sought after TSHTF for shooting small game, etc. Like matches, individual rounds may trade for small things, and whole boxes for larger items. Stock up on the size ammo you use yourself, as well as very common sizes. I expect shotgun shells will also be very popular, and there are just a few common sizes to choose from. Even if the worst never comes, you’ll have lots of ammo at 2010 prices, which may seem cheap a few years from now.
Candles. I bought 144 of the 15-hour unscented white Votive candles for $48, or just $.33 each, at Candledepot.com. I’ve seen 500 of the 6 hour candles for 20 cents each on eBay. In either case, these are much smaller and cheaper than the Nuwick 120 hour candles. (2 cents per hours versus 8 cents per hour). They fit nicely in your pocket, and are lightweight and durable. You get light, and can cook with them using several candles under a pan. Others will want them, when the grid goes down. If you’re looking for a business after TSHTF, I saw a Votive candle maker on eBay for $1,500.
Calcium Hypochlorite (granular chlorinating powder / pool shock) 1 lb bags cost just $3.50 at inyopools.com and will make roughly 12,000 gallons safe for drinking. I’ve put away 4 bags.
1/8 oz of the powder will make a gallon of Chlorine Bleach. So each 1 pound bag makes about 1,000 pints of Bleach. Each pint of Bleach will then disinfect 12+ gallons of water.
Pint-size plastic bottles should be very common, and part of your own water storage stash. As a business, you could sell or trade pints of Chlorine Bleach that you have made with your powder. A quick whiff of the bleach should convince your customers that it’s genuine. Your customers can then disinfect 12 gallons of water that they acquire on their own. You can have a business, and maybe save lives at the same time.
Seeds. Once things shake out, many people will be anxious to get a garden started. Seed packets are useful for you to have tucked away, and the perfect size and weight for trading. And they have a long shelf life if kept cool and dry. Sealed commercial packets will have instant credibility as being genuine. Plus, they’ll have instructions on the back. Watch for close-out sales after the planting season winds down and stock up on the most popular seeds. Again, your trade items will make life better for others.
2 cycle motor oil in pre-sized bottles. When trouble comes, people will have lots of 2 stroke items like Chainsaws that they need to keep running. They’ll probably be able to find gasoline in small quantities, but a little bottle of oil, just right for 2 gallons of gas, could be very hot for trading.
Rechargeable AA and D batteries. When the grid fails, people will turn to batteries for lights and small appliances. And they will quickly go thru the few regular ones they have lying in the drawer. IF you have a supply of rechargeable batteries, and the solar set-up to re-charge them, and offer to swap Charged batteries for their Discharged batteries, you’ll have a sustainable business. You charge a high price for their first rechargeable batteries, but then swap charged batteries for discharged batteries at a discount. Stock up now, and you can keep the neighborhood happy and electrified.
Nails. When things are unsettled, people will need to work on their shelter and Jerry-rig various contraptions. Nails will be vital. Individual nails may trade like individual cartridges or matches. Wood screws should be stocked as well. Watch for sales, and buy lots of boxes. Hit the garage and estate sales too. While there, pick up non-power tools for your own use.
Thread, straight pins, needles and safety pins. When Wal-Mart isn’t open to sell you new clothes, sewing will be important. And that will mean repairing what you’ve got, as well as making new items. Who will still be making safety pins, when the balloon goes up? Better to stock up now, and fill that need when it arises. Shop at Dollar stores or Wholesale clubs for bulk pins and thread. Also watch the garage sales and estate sales.
Cable ties. Lightweight, and so handy. When people have to fend more for themselves, cable ties will be very handy. You can buy a big tube of various size ties, for less than a penny each. I see them at bargain prices at flea markets, but test a few out, to be sure they actually work!
Candy Bars and Cigarettes. This one is tricky, since they have a shorter shelf-life than the aforementioned items, and are a more fragile. Still, they are so desirable, that they will be traded, I believe. If you have the skills and supplies to produce candies from raw ingredients, or can roll cigarettes, you should have an ongoing business.
These are just the things that come immediately to mind when I try to think of items that would work as currency, when dollars no longer work.
Look over what you use regularly, identify the small reusable ones, and see if they meet the requirements of a Pseudo-currency. Then stock up on them while they are available, and inexpensive. If the worst never comes, you can always use them yourself.