YOUR MONEY’S NO GOOD HERE
Everyone longs for financial stability in their life; however, despite your best efforts, circumstances outside your control might cause the value of your assets to hit rock bottom in a matter of days, if not hours. What if such a catastrophe affected hundreds of thousands, millions, or tens of millions of people all at once? Could there be a foreseeable future where money has no value, and all that financial strategizing and planning you’d spent years on was in vain? Elections, economic sanctions, inflation, recessions, the stock market, and just plain old fear are just some of the elements that can contribute to the fluctuating value of money. Sometimes a perfect storm of those factors causes economic turmoil for months or years, as we saw in the Great Depression of the 1930s or the Great Recession of the late 2000s.
If a catastrophe caused the dollar to plummet in value, would something else become the de facto currency? After all, the true value of anything is whatever someone’s willing to pay for it. Would people trade in cryptocurrency, jewels, or precious metals until stability is restored and paper currency regains value? Or would the collateral damage of the financial world cause durable goods such as tools, guns, or survival gear to become modes of exchange, since everyone needs them? We asked a few experts how cash alternatives could come into play during a financial crisis and what form they may take.
Specifically, we picked the brains of financial consultant Sandip Sehmi, economist Dr. Chris Thornberg, economics professor Dr. Raymond Sfeir, and precious metal expert and cryptocurrency investor Chris Kahrhoff to weigh in with their thoughts. While their responses vary, they provide a baseline of recommendations to plan for such a catastrophe. Like every other aspect of survival, having an understanding of options is key to adapting to challenging circumstances.
RECOIL OFFGRID: What are some possible alternative forms of currency if there’s a situation where cash has no value?
Chris Kahrhoff: U.S. coins were made out of precious metal up until 1964. These are coins that are 90-percent silver, so dimes and quarters because their face value represented exactly what their silver content was. So a silver quarter from that period said 25 cents, but today it’s worth about $4.50. Because it’s illegal to melt down U.S. currency, those are traded in bags where the face value will say $1,000, shorthand for saying 1,000 ounces that’s worth about $19,000. Of course these prices constantly fluctuate, so by the time your readers see this 1,000 ounces might be worth more or less than that. That kind of “junk silver,” as it’s called, I could see being traded. It’s still theoretically a quarter, but it’s ¼ ounce of silver.
These coins are very easy to find. There’s a website called APMEX, a large precious metal dealer based out of Oklahoma where you can buy junk silver in different denominations. The problem with 1-ounce silver coins is that today it’s worth whatever it’s trading for, but no one’s going to fractionalize that. That’s why I think the junk silver works for buying milk, bread, gas, or something like that. Maybe for larger purposes, a 1-ounce coin or 10-ounce ingot of silver would be used.
Money is just shorthand and a means of exchange. Someone will always want to figure out that shorthand rather than figure out whether they need 500 rounds of SS109 or 6 gallons of gas and which to trade for. People would rather use something more fungible, meaning it’s the same no matter whom you trade it to. The fungibility of silver or gold is a faster process. People will want ammo, food,
