Okay, say TEOTWAWKI happens. You have some silver coins and want to buy something. How does the person you buy whatever from know what it is actually worth since it is constantly changing. If you buy something for $2.00 do you hand the person 20 silver dimes? Or does the shop owner have to find out what silver is worth that day and weigh what you hand him. Also I've read the government is going to confiscate all gold including collectors old gold. I live in Minnesota west of the Mississippi about 50 miles on a lowly 10 acres surrounded by corn and soybeans. - Sherry in Minnesota
JWR Replies: WTSHTF, the spot price of silver will likely zoom up to $50+ per ounce before the formal markets disappear. If the Internet is up and/or newspapers are still published, the daily spot price of silver will be widely known. But even in a total collapse (grid down, and Internet down) everyone will at least know that silver is "valuable." But that is that is when will get interesting , because fixing a real world price in barter terms will be subject to negotiation. I believe that a general consensus of "X times face value" will soon develop. There will be no scales and very little calculation required. Read the "For and Ounce of Gold" (Barter Faire description) chapter in my novel "Patriots" for some examples. As previously stated, I strongly recommend that you get your beans, bullets and band-aids squared away before investing in any silver for barter. I predict that common caliber ammunition ("ballistic wampum" in Jeff Cooper's parlance) will be the preferred barter currency in the immediate post-collapse period. It will only be later, as order is gradually restored, that an interest in precious metals will revive.
Parenthetically, a curious phenomenon has been noted by travelers in the jungles of South America that have visited remote villages where gold is mined. There, they have negotiated buying raw gold nuggets and gold dust. Even though there was not a radio in the village, the local villagers could quote the current spot price of gold to within a few dollars per ounce. Markets are sophisticated, even in unsophisticated places. News gets around with surprising regularity, even just by word of mouth on jungle trails and rivers. As Bill Bonner of The Daily Reckoning so aptly puts it; "Mr. Market is never fooled." The classic economists refer to this as "The Invisible Hand" effect.
As for you point about gold confiscation: Gold has been confiscated once before in this country. (During the Depression of the 1930s, by the socialistic FDR administration.) That could happen again, in turbulent times. For this reason, I recommend that if you have the space available--in the bottom of your gun vault or perhaps behind a false wall --that you invest far more in silver than in gold. (As it is less likely to be subject to a confiscation decree. Being in smaller dollar increments per coin, silver coins are also more readily divisible for barter.) After you've bought your "junk" silver for barter if you decide buy any gold, I recommend that you do so without a paper trail.