When the Economy Collapses, What is “Money”?

It seems like every year there is talk of an imminent economic collapse. 2017 is no different. With the economic deck stacked against Trump, I don’t have much confidence that he, alone, can turn things around. After all, the national debt is completely out of control and has doubled in the past 8 years. Sooner or later, the piper must be paid and preppers who breathed a sigh of relief when Trump was elected, may want to think again, as I wrote about in this article.

So, with continued predictions of economic collapse, I asked Mac Slavo over at SHTFplan blog to share with my readers his insights into how a family might survive following a collapse of our money system.  Here is his answer, in his own words:

Economist Mike Shedlock defines money through the eyes of Austrian economist Murray N. Rothbard as, “a commodity used as a medium of exchange.”

“Like all commodities, it has an existing stock, it faces demands by people to buy and hold it. Like all commodities, its “price” in terms of other goods is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. People “buy” money by selling their goods and services for it, just as they “sell” money when they buy goods and services.”

What is money when the system collapses and the SHTF?

In disaster situations, the value of money as we know it now, changes, especially if we are dealing with a hyperinflationary collapse of the system’s core currency. This article discusses money as a commodity in an event where the traditional currency (US Dollar) is no longer valuable.

In a collapse of the system, there will be multiple phases, with the first phase being the “crunch”, as discussed in James Rawles’ book Patriots. The crunch is the period of time directly preceding a collapse and the collapse itself. Too often, preppers prep for “the crunch” and fail to realize they will have to be ready to survive for many months, if not years afterwards.

Traditional Currency

Initially, the traditional currency system will maintain some value, though it may be rapidly depreciating in buying power. For those with physical, non-precious metal denominated currency on hand (paper dollars, non-silver coins), spending it as rapidly as possible is the best approach. In Argentina during that country’s many economic collapses, if someone received a check in payment, the immediately rushed to cash it, knowing that it was losing its value minute by minute. This short Kindle document, written by a survivor of that time in Argentina’s history, details that event.

 

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source: http://preparednessadvice.com/shtf/when-the-economy-collapses-what-is-money/#.WG6bY7YrKu5