Ok, first of all this is not a post about returning to a gold, silver standard. We’ll save that for another day perhaps. Nonetheless, there are gold and silver investors or stackers who see the day when their stack of silver or gold might be used as money or for barter or trade. Take this article with a grain of salt because this article is for them.
When I put myself into a scenario where economies hit the fan and we are using silver as money, there are two important parts in this equation. First, whomever I trade with must be willing to accept silver or gold. Second, I must be able to pay the exact amount or close to it for what I am trying to purchase. This means I must be able to reason that if I’m operating in 1 ounce silver coins, I may be losing “money” in each trade. I have to assume the person I’m trading with will not have “change” for me. Therefore it stands to reason that if people expect or anticipate on using their gold or silver for trade or barter, we must all have smaller fractionals in order to get the system going. Fractionals meaning smaller units for silver such as 1, 5, or 10 gram units.
Think about it, using today’s logic if I wish to “buy” something from a merchant that perhaps is $5 and I only had a $100 bill and the merchant had no change, either I lose $95 when I buy the product or I have to find someone with smaller denominations, “change.” Fast forward to a time when/if we must use our gold or silver to buy something. Understand that you cannot expect a merchant or someone around you to break your 1 ounce coin into 1 gram or 5 gram units. You must have your own smaller fractionals or waste some of the value of your 1 ounce coin.
Yes, I understand and agree that buying fractionals comes at a higher premium. However, consider this. What you save today by buying ounces or kilos will be lost if you use it as money and can’t pay close to, or exactly the amount of what an item may “cost.” In addition and on the bright side, if you are carrying fractionals you then help merchants or trading partners to circulate gold and silver. This ultimately helps you and all those who wish to use gold and silver as a bartering tool should economies continue on a downward spiral.
As gold/silver investors, the responsibility is yours, mine, and ours to have some smaller units of silver and gold should we use it for trade or barter. Yes, we will pay a little more now regarding the price-premium, but we will save a lot more later should we use it. Not to mention, once we use our gold or silver, it may be difficult to get more, and we must make every grain count. So as you buy your ounces or kilos, don’t forget to occasionally buy the smaller grams as well. In the end, the only way a system of barter or trade using gold and silver can work is if we all have our own smaller units to help the system grow and circulate. This is a very important concept to remember.
I’m all for a better and peaceful world. Unfortunately it seems some world leaders are not. Let’s all do our part and hope for the best but prepare for the worst. Being prepared means we will be a blessing to others instead of being a burden others. Good luck 🙂