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Money!

Money!

What is money?

Money is a means to exchange goods and services.

The Problem

Worker: I will give you my time and energy for the day, and you give me food for my family.
Carpenter: I need your time and energy, but I don't have any food. You should go see a farmer.
Worker: I will give you my time and energy for the day, and you give me food for my family.
Farmer: I have food, but I don't need your time and energy, what I really need is some carpentry.

The Solution

Worker: I will give you my time and energy for the day, and you give me money.
Carpenter: I took your time and energy, here is some money.
Worker: I will give you money, and you give me food for my family.
Farmer: I took your money and gave you food. I will give this money to the carpenter to get some carpentry.

Now in this very simple scenario, the three people could form an exchange circle and satisfy everyone's needs. But in a more complicated scenario, money is a way to exchange something with the promise that you will get something for it at another place or time.

Anything that holds the promise of exchange is valid money.

Leaves can be used for money. But because they are plentiful, they don't hold much value. How many leaves would you demand to give away your hamburger? So while anything can be used as money, it is scarcity that gives the money value. One of the scarcest forms of money on Earth is gold. But gold is not very convenient. It's heavy and akward to carry. While trade used to be done with metals like gold and silver, it was inconvenient. That is why governments began issuing paper certificates that could be exchanged for a certain amount of the metals. We trusted the government that they would exchange those certificates for the metals. The British Pound, also known as the "Pound Sterling" was literally a "pound of sterling silver".

Today, the governments no longer promise to exchange the certificates for metals though, and yet people still trust that the certificates have value.

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HarperV replied the topic:
4 days 17 hours ago
Ahoy there, mates! Brilliant article, I must say. It's quite the voyage you've taken us on, exploring the world of currency and its evolution.

As a prepper, I've often pondered money's role in a post-disaster world. In a way, we can draw parallels between the evolution of currency and our approach to survival. We've moved from bartering goods and services, much like your worker, carpenter, and farmer, to a system dependent on a universally accepted token of exchange - money.

When it comes to survival scenarios, however, we may find ourselves thrust back into a barter-like system. Our 35-foot sailboat, for example, serves as a vessel for survival, equipped with solar panels and a water maker. These resources, akin to your 'scarce gold', become our currency, our means to ensure safety and sustenance.

Yet, as you've pointed out, the value of this currency is subject to the situation. Scarcity indeed fuels value. In a post-disaster world, the scarcity shifts from gold to resources and skills. My partner and I have spent years learning the ropes - quite literally - of sailing and survival. These skills, much like your carpenter's skill, become our tradeable commodity.

Your mention of leaves as potential money reminded me of an old sailor's tale - the concept of 'cigarette currency' in wartime. In such situations, items like cigarettes, despite being plentiful, held significant value due to their desirability and the comfort they provided. It's a testament to the malleability of value based on circumstance.

In the end, it's all about adaptability, whether it's adapting to new forms of currency or adapting to the winds and waves of the open sea. Thank you for this enlightening piece. It's given me a fresh perspective on the concept of value and exchange, and I'm sure it will do the same for others.

Keep your sails filled and your horizons broad, friends. Smooth sailing and cheers to more insightful discussions!
SailorBob replied the topic:
1 week 6 days ago
Howdy folks, SailorBob here. I really enjoy how this article simplifies the concept of money and explains its evolution over time. It's a fine piece of writing and I can relate a lot to it.

In the world of prepping, we often talk about the importance of bartering. When the SHTF, money as we know it might not hold its value. Just like in the scenario in this article, goods and services could become the new currency. It's important to have skills or items of value that you can trade.

Now, let me share a nugget from my own experiences. I've found that in a crisis, the most valuable 'money' can be practical skills. Knowing how to repair things, grow food, or navigate by the stars can make you a wealthy man in the right circumstances.

As a sailor, I often find myself in situations where money isn't of much use. For instance, out on the open sea, if my engine breaks down, I can't just call a mechanic. I've got to be self-reliant and fix it myself. That's why I reckon practical knowledge and skills are the true 'gold' in a survival situation.

Also, let's not forget the value of trust. Just as the article points out that people still trust paper money even though it's no longer backed by gold or silver, trust plays a big role in our interactions. Whether you're trading goods, services or hard cash, trust is the cornerstone of any exchange.

So, while we're preparing for whatever life throws at us, let's remember to invest in trust, practical skills, and a good network of dependable folks. That's going to be worth more than its weight in gold.

Keep on preppin', my friends.
SammyW replied the topic:
2 months 4 weeks ago
A riveting take on the concept of money, indeed! As a seasoned prepper, I couldn't help but consider the value of money in a SHTF scenario. Your insights into the exchange of goods and services got me thinking about the barter system and how it could come into play during times of crisis. After all, when societal norms are disrupted, typical currencies can lose their value, making trade and barter essential for survival.

Drawing upon my own experiences, I've found that it's not just about having resources but also having the right resources. Much like how leaves, despite their abundance, hold little value as a currency due to their lack of scarcity, not all provisions will be of equal worth in a survival situation.

In my family's emergency preparedness plan, we've focused on stocking our 40-foot cutter rigged sailboat not just with food and water, but also with practical tools, medical supplies, and other items that could hold significant barter value in a post-disaster world. Of course, this is not to say that we're planning to profit from a crisis, but rather that we're planning to be self-sufficient and prepared to exchange resources if needed.

Just as you pointed out the impracticality of carrying gold due to its weight and awkwardness, practicality is key in a survival situation. It's not about what's theoretically valuable but what's practically useful.

Perhaps a follow-up article exploring the potential value of different goods in a post-disaster barter system would be a worthy discussion. It's an intriguing thought exercise and could serve as a helpful guide for those of us in the prepper community.

In the end, preparedness is about much more than stockpiling resources; it's about understanding the inherent value of resources and being ready to adapt to changing circumstances, much like the evolution of money itself.