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To: fr_freak

I hear you and have thought about it. The brass and lead thing I agree with. With gold, I really don’t know. Historically it has been valued, but if we were plunged into 100s of years of “dark ages” would gold be valuable during the dark ages or would barter of useful items be more useful?

Hopefully 2014 gives Barry the Userper a brick wall that he cannot pass and he will be written into history as the worst and most constitutionally damaging presidents ever, but with Woodrow Wilson snorkling his butt.

26 posted on 02/02/2013 8:33:34 PM PST by MtnClimber (I did not vote for 0bama, someone else did that!)
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To: MtnClimber

would gold be valuable during the dark ages or would barter of useful items be more useful? <<

37 posted on 02/02/2013 11:59:54 PM PST by M-cubed
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To: MtnClimber
...would gold be valuable during the dark ages or would barter of useful items be more useful?

Precious metals (Gold and Silver) are the way to go, because they are money. The concept of money - and why it always wins out over barter - requires a little unpacking:

Precious metals possess all of the attributes of money (fungibility, portability, store of value and so forth)

Fiat currency has most of the attributes of money, but it does not act as a store of value. After a few years a dollar bill has only a fraction of its original buying power. However an oz of Gold from (e.g.) the time of the Incas retains its buying power.

Something that has the attributes of money is valuable because it has those attributes. Would-be barterers can use money to overcome the otherwise insuperable problem of discovering a Coincidence_of_wants .

Trade requires money. Let's examine this vital function of money with respect to the coincidence of wants, and also get a feel for why Barter rarely works:

Chicken farm example:

You run a chicken farm, and you need to buy a great many things to keep your farm and family going.

In a given month you need - for instance - to buy chicken feed, to hire someone to repair your generator, to buy a nailgun to allow you to mend chicken barn #9, to hire a midwife to help give birth to your widowed daughter’s baby, to buy milk and bacon - and so on.

Some of these resources will be buyable with chickens or eggs. And some of them will not - there's no coincidence of wants if the midwife or the nailgun owner don't want chicken meat or eggs.

Remember: these people need to replace their consumables in order to stay in business: they can't use your food to buy more nails or WD40 or painkillers or whatever they need from their suppliers a hundred miles away.

But all or most of these resources will be buyable with money - with Gold or Silver. This is because offering money as part of a transaction vastly improves the chance of a coincidence of wants

Chicken farm example - continued:

You’ve had a successful month at the farm, and you now have loads of chicken meat and/or eggs to sell.

100 people line up to buy what you’ve got.

* 50 of them have horribly devalued fiat money, food-stamps and a bad attitude

* 40 of them have plans for barter - some of which are better than others.

    One is willing to work on your farm for food
    Another is willing to sell you their body
    Another has a stack of AA duracell batteries
    Another has some miniature bottles of scotch

- and so on, with dozens of variations. You have to gauge each transaction on its own merits - an exhausting process - and half of the barter offers are simply going to be unworkable.

* 10 of them have Gold and/or Silver.

Which customers will you prefer selling your produce to? They all want what you've got - but do you want what they've got? Again: real money vastly increases the chance of a coincidence of wants.

In summary:

Only Gold and Silver fulfill all of the prerequisites of money. This gives them inherent value - useful (for instance) in a survival situation.

Barter (however) turns out not to be a workable solution in the great majority of cases due to the need for a coincidence of wants.

Lastly - as we know: fiat currency can also be used to run a chicken farm. It has the appearance of money. However fiat currency is currently losing ~7% of its buying power a year. Once price inflation reaches a certain level, only real money will be accepted as money.

Hope this was helpful.

40 posted on 02/03/2013 2:53:48 AM PST by agere_contra (I once saw a movie where only the police and military had guns. It was called 'Schindler's List'.)
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