Quote from peilthetraveler:
Just wondering, but can you think of any time & place in history where a person that had cash and/or PMs could not buy food & water with it? I mean in any hyperinflationary or deflationary state, was there anyone that said "No...I dont want that worthless yellow metal for my potatos" I might be able to understand if the guy you were asking only had 1 day of food left, but any farmer or someone who has bulk food would surely sell it for a profit as commerce does not stop for anything. People will always trade especially if they have too much food to eat which I'm sure there will be some and they will sell their excess to the highest bidder. I dont know about you,but if i was the seller, I would be selling to the guy with gold, not the guy trying to trade me an old bike, an x-box and 20 rolls of duct tape.
Even in deflation Gold is worth something. Paper money can never be worth so much that you wont be able to trade it for gold. Gold holds its value in deflation too you know. What I can buy for 1 ounce of gold today, I will probably be able to buy it with 1 ounce in a deflationary situation. I will only be able to buy less dollars with that gold,but not less products.
Trying to fit a book into a single post makes for some ambiguities and generalizations. That said, I'll try to answer your questions.
In Argentina, the currency was devalued, and for some period of time, of questionable value. PMs were trading for food, but nobody had much, so small gold rings, and links from gold chains were the common currency.
In Iceland, all three banks closed, and nobody had any currency or credit. I suspect some shops did accept gold, some others accepted Kronur, some others still may have accepted dollars or Euros.
After Katrina, I didn't see much in the way of any trade going on, there simply wasn't enough of the necessities to go around. Similar conditions applied during the King riots in LA.
It's a complex subject, but some "general rules" seem to be:
1. Venturing forth to any location where trade might take place can expose one to unacceptible risk. Stockpiles of basic necessities allow you to ride out the storm in and around your home, and familiar neighborhood.
2. Disasters seem to be dynamic and evolutionary in nature, changing over time. What worked yesterday may not work tomorrow. What works tomorrow may not work next week.
3. Transactions require both a willing buyer and willing seller. The accepted medium of exchange must be common to both. I can see situations where the seller who has what you need refuses what you opffer to trade, and converse situations where the seller who accepts your trading stock does not have what you need for survival.
4. Information can be supplanted by rumors when times are tight, and confidence is generally on the low ebb. If many are hungry, I can see a higher percentage hoarding food, instead of trading surplus food or water, for uncertain "wealth", redeemable at unknown points in the future, for example.
5. Don't forget opportunity during any meltdown. Desperate, uncertain, ill informed people will trade capital assets for pennies on the dollar when their survival is threatened. If the liberals' objective is wealth redistribution, then your objective is to retain asset value overall. If your PMs and currency are tied up in food, water, and survival transactions, you won't have the liquid assets necessary to take advantage of trading opportunities that may arise.
In my opinion, it all goes back to diversification. The better you cover your basic needs before any crisis, the better you'll be able to deploy stockpiled assets in the day to day dynamic aftermath of any dislocation.
