As taught at our Safety Step: Protect Your Future event, bartering is a system of exchange that is both intriguing and very inefficient. There were many primitive civilizations that used a bartering system, but they eventually had to evolve to a more sophisticated exchange system in order to experience real economic growth. But even though the human race discovered better ways to grow an economy, did barter totally disappear? It actually has not, and even to this day there are places in the world where it occurs regularly. Let’s take a look at an example that occurred in fairly recent U.S. history, and how we can learn from it.
The Great Depression & A Lack of Money
During the Great Depression the money supply was extremely low, which severely hurt the working class of Americans who had tremendous trouble finding work, and, if they did, the hours were not enough. Deflation had occurred, which simply means that there is just not enough money in circulation. The dollar was extremely strong because of this, but that didn’t help the working class who needed enough to pay their bills, feed their families, create wealth, etc. So, many families had to revert to a bartering system in order to put bread on the table and survive. Unfortunately, there were many American families who were not prepared for this scenario, but those who had skill sets to implement during this time period were able to come out on the other side almost unaffected.
Bartering for Survival
Families, like my grandfather’s, who were fortunate enough to own land, livestock and the ability to grow their crops, were better off than most. Families in this situation were able to easily revert to barter as a source of trade during this time. Having the ability to grow vegetables and raise chickens was an invaluable resource and skill set, which is something to think about today. Even for those of us who might not be in the place where that’s possible right now, it might be something to strive for; I know I certainly am.
Many of the farmers, and families who owned land, were able to make easy trades with their neighboring farmers, such as eggs for vegetables, or milk and dairy for meat or other poultry, and they even sometimes used silver. Now, keep in mind, the circulated coins of that time had real silver in it. So it wasn’t exactly how it would be today, if we were to use bullion coins or bars for trade. They just used whatever U.S. coins they had hoarded away, which was yet another invaluable resource.
Other families, who were not land owners, thus not being able to live off of the land, had to go to greater extremes to provide for their families during this tough time. Some in the northern states acted as middlemen for alcohol trade; this of course was also during the prohibition, making it an incredibly risky life source. But, they did what they had to do, just as so many other families had to.
Looking at just a few of these examples, can you see a certain type of currency that was once again being used? They were bartering, but exactly what were they bartering with? If you remember from our Safety Step: Protect Your Future course, commodity money was a special type of currency that had multiple levels of value: monetary value and consumption value. That’s exactly what some of these families had to use in order to survive, and it’s amazing that such a primitive exchange system can still work so well in a modern day scenario!
How We Can Learn From This
As I mentioned earlier, it’s not always going to be possible for some of us to “live off the land,” depending on where we’re currently from and what we have access to. However, there will always be some ways in which we can protect ourselves and our family during similar times of financial crisis. That’s why we teach how to properly invest in precious metals, so that even people who live in cities can have a way to acquire hard assets which can act as a source of trade.
We want to equip as many families as possible with this kind of information, because even during times of prosperousness we should be looking ahead to a time in which it swings the other way again. It’s during these times when the prices of precious metals can increase significantly, making it far more expensive for people to protect themselves using gold and silver as the tool.
That is why TRADEway advocates purchasing gold and silver when most everyone else isn’t even thinking about putting money into “safe haven” investments. This can provide optimal entry points for anyone wanting to plan ahead, and be prepared for anything that may come to be a drastic scenario.