Doomsday scenario: The dollar budges loose and begins a spiralling devaluation with foreign governments clamoring to be cashed out of their multi-trillion bond reserves… in a matter of hours, the dollar buys a nickel’s worth, within weeks a roll of Benamins is less valuable than a roll of Charmin.
What would be the most likely free-market substitute(s)? I understand that it would likely vary from region to region. It would not be gold. Maybe silver coins, but only those who already have them would find them of any value, very few people possess silver coins. Even silver would not be selected as money by this kind of apocalyptic market.
My guesses (feel free to critique):
Cold, hard cash. Even if the dollar collapses, it is the book money which will collapse in value. When banks and other institutions refuse to redeem book money for physical currency, the dollar could split into two distinct monetary units… book dollars and physical dollars. Unless the Fed cranks up the literal, physical printing presses, dollar-denominated cash could become more valuable during an economic collapse. However, very few people hold more than a tiny fraction of their wealth in physical dollars, making it unlikely the market would select this as a replacement for book dollars.
Cigarettes. These function as money within most prisons. They are widely demanded for their non-currency use, making them highly marketable (liquid). There is less demand within the general population for cigarettes, and there are many other commodities which people in the general population may possess which have higher “value density.”
Illegal drugs. Illegal drugs have much higher value density than cigarettes and potentially a wider market demand for their commodity use, especially in an apocalyptic economic scenario. The disadvantage is that if you get caught holding them by the police, you will have all your wealth confiscated. However, this may be the least of your worries.
Cell phone minutes. Used in Zimbabwe in lieu of cash, cell phone minutes could come into much higher demand as the dollar collapses and the whole concept of credit-based, multi-year cell-phone contracts goes down the tubes and people switch to pre-paid networks. Cell-phone minutes could trade at face value or discounted by networks which have more/less coverage, etc.
Gift cards. These might trade a certain discounts from the face value depending on the marketability of the goods for which the gift card can be redeemed. I.e. grocery store gifts cards may trade at face value while a gift card to Kohl’s might trade at 50 cents on the dollar, etc.
Ammunition. There may not be sufficiently widespread demand for the non-currency use for this to become a viable currency. Same problem as with illegal drugs… possessing guns or ammunition would likely be a crime in an economic doomsday scenario.
I’m not so sure they have it as under control as they like to think they do. An uncontrolled collapse is a very real possibility, especially if people begin spontaneously resisting the golablization agenda. I’m not saying this is likely, only that it is possible. The reason I want to know what would likely replace the dollar is exactly that I’m skeptical of the globalists’ ability to bring about a Bancor or Amero without collapsing the whole system as they did in Weimar Germany.
I’m skeptical too, bro, because if you have an uncontrolled collapse like you’re talking about, that’s not good (maybe some civil wars, riots, civilian militias running things) and if you have a controlled collapse where we get one world currency, that’s not good either because that leads to one world government. A strong dollar right now is essential to the maintenance of the world as we know it, in my opinion.
But if banks refuse to redeem book dollars into physical currency and the Fed doesn’t fire up the printing presses to make this happen, then no, they are not the very same thing. M0 (physical currency) is actually a tiny fraction fo all dollars in “existence”.
You could swap out the tobacco, true.
Maybe not, but we would be an industrial economy anymore, would we?
Yes, ammo manufacturers would be at a huge advantage if this scenario happened.
OK.
No. However, I am quite certain that in the days/weeks/months following an uncontrolled economic collapse, gold and silver coins would not be money because only a tiny percentage of the population holds these. I’m not saying gold and silver coins could not be traded for (lots of) money, retaining a great deal of their value. However, they in themselves would not be a medium of exchange useful in the settlement of accounts without wait, discount or premium.
