(H/T Gold Silver Worlds)
A lot of folks took advantage of recently falling gold and silver prices to beef up their precious metals holdings.
Those adding to their portfolios understood the old adage of buying low and selling high. Unfortunately, others wait until dollar values of gold and silver have zoomed before deciding to convert their paper money.
Still, most make buying decisions for their own good reasons. They either have the confidence of their convictions, or they have good questions still unanswered.
One of the frequent questions we get at Money Metals Exchange is a good one – How would I go about “spending” my gold and silver in a barter-type economy?
Readers and clients want to know if gold and silver would be accepted by a shop merchant or by a tradesman offering his talents. They ask how a seller would “make change” for gold and silver coins or bars. We feel those are perfectly valid questions.
The answer highlights the simple advantage gold and silver would give you in every financial transaction.
Every deal requires a seller making an offer and a buyer accepting that offer. Unless the buyer pays his money, there is no deal. The buyer always has the final option to seal the deal or walk away to find another seller who accepts metals.
If the time ever comes in your life or the lives of your children that a catastrophic financial collapse destroys the U.S. dollar or hyperinflation sends dollar prices soaring, gold and silver will always hold value. Goods and services for barter would also have value, but there would be no meaningful, stable “dollar price.”
Precious Metals Become the Coin of the Realm in a Breakdown
Metals would be the primary form of currency most would need and gladly accept, followed by other forms of barter, including personal skills and talents.
In a financial collapse, the holder of gold and silver would be in charge of his metals transactions, not the fellow trying to sell goods or services. You need the goods, but he needs a reliable currency. If he’s competing with others selling the same thing, then you’re in charge, not him.
You’ll recognize another way of saying it – He who has the gold makes the rules.
The question then is not whether the merchant will gladly allow you to spend your gold or silver coins. The only question is whether he has enough goods or services to get you to part with your monetary metals.