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Sunday, October 16, 2011

Alternatives to FRN (Federal Reserve Notes)

So what happens if (read when) the dollar crashes.  How will we get food, clothing, heat, etc?  Well, it won't take very long for competing currencies to emerge, mostly backed by state and private holdings of gold and silver.  These currencies will either BE physical gold, silver, and copper, or will represent actual amounts of these metals (or perhaps some other holder of value) held in vaults somewhere, where those value holders are actually audited and examined for accuracy.  Given the current value of the dollar relative to other goods (like gold, silver, etc..) it seems likely that those who have invested in actual property (rather than, say, the GLD etf or gold options, shares, or other pieces of paper that represent gold in a bank that trades in US dollars) will do very well, and be able to buy the goods they need.  Things like guns, bullets, gasoline, basic foodstuffs, dry firewood, etc will be in high demand, and luxury goods will be in low demand.

It's important to start thinking about how things will be if the dollar no longer holds any value.  Even now it only holds imaginary value, which, for most, is becoming less and less dependable, which is reflected in prices of goods, and the value of gold relative to the dollar.


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Some few of the things I find interesting: