If your local government currency, such as dollars or euros, did not exist, what could use to buy a meal that currently costs $20? What do you think a local restaurant would accept as payment?

You need something with these characteristics:

• Valued by people in your community
• Won’t decompose
• Easy to break into smaller pieces (divisible)
• Light compared with its value (portable)
• Stable value
• Similar to other instances (gold is gold, regardless of where it is mined)

You need something that is easy to trade, at the current market price, and at any time.  A TV wouldn’t be good because it  loses value immediately after purchase, requires extra effort to find someone who wants that model, and can’t be broken into smaller pieces.

For a meal, many people have used silver where available. In times of crisis, people use water. In prison, people use stamps.

Different communities have different values. Value is subjective and preferences change. If silver jewelry loses its allure or silver is used less in electronics, then silver would not be a good money product. Spices once traded as money but as they became accessible, the value decreased, and people chose new products as money.

Regardless of what you choose, all money products can be transferred with a money substitute, such as a credit card or paper certificate. 

Review what people have chosen in the past so you can decide what you might accept now or in the future.

Past  |  Within Unstable Economies |  Current  |  Future  

Past

Monies fall out of fashion or are outlawed. Each product below could return to being used as money, if people had monetary choice. All could be transferred by a charge card, electronic transfer, or a paper note.

1. Salt slabs (the word “salary” comes from “salt”)
2. Beaver pelts (the word “buck” comes from using animal hides)
3. Chia seeds
4. Cocoa beans
5. Copper
6. Tea bricks
7. Tobacco
8. Beads
9. Vadmal (cloth)
10. Cigarettes (the old faithful!)
11. Livestock
12. Conch shells
13. Barley
14. Spear heads
15. Gold
16. Silver — You’ve probably heard of the silver dollar. At one point, quarters, dimes, and nickels were made of silver, until the silver became more valuable than the “face value” of the coins, so the government switched to inexpensive metals.
17. Copper — Pennies are made of copper b/c copper has a value. At some point, maybe even now, the copper in the penny will be worth more than the value of a penny and, though it’s likely illegal, some will melt them down to get the copper value.

Read The History of Money, by Jack Weatherford

Within Unstable Economies and Prisons

Money choices where people are not restrained by central banks can help you understand how money organically comes into existence. Fundamentally, people choose a product that is valued at that time, in that area.

• Unstable Economies
  • Clean Water (“Water is the currency” was said after the earthquake in Haiti, not fiat paper money.)
  • Cell phone minutes
• Prisons
  • Cans of mackerel fish (currently used informally in some U.S. prisons; cigarettes are no longer money b/c inmates can’t smoke)
  • Books of stamps
  • Instant coffee
  • See Wired.com article and WSJ.com article
• Prisoner-of-War Camps
• • Whatever is delivered by aid groups.
  • Read about money in prisoner-of-war camps (long article)

Current

Here are some common contemporary money products and how to acquire them.

1. Precious Metals such as Gold, Silver, Platinum
   1. Coin dealers such as Kitco
   2. Gold futures via exchange traded funds such as GLD or SLV
   3. Banks: Goldmoney.com, Bullionvault.com
   4. Note: precious metals have a higher capital gains tax
2. Raw materials via “Futures” - “Futures” are promises to buy an item. Airlines use futures to lock in fuel prices. Futures can be sold before the date when you are supposed to buy the good. You can easily purchase futures via exchange traded funds (ETFs). If you are worried about food prices, store your wealth in an agriculture ETF fund. If you’re worried about energy prices, choose an energy ETF.
   • DB Commodity Index Fund
   • DB Agriculture Fund
   • GreenHaven Continuous Commodity Index Fund (GCC)
   • ELEMENTS Linked to the Rogers International Commodity Index – Total Return SM (RJI)
   • See article about many commodity ETFs
3. Singapore Dollar – This is a national currency but Singapore, at the time of this writing, does not have a deficit, which is often the main reason for central “monopoly” banks to issue more currency, and this devalues all existing currency.
1. Open a PayPal account and convert to the Singapore dollar
2. Learn more from this article about the Singapore dollar
4. Permanent Portfolio – This is a mutual fund that divides money into four quadrants: stocks, gold, US 30-year bonds, and US short-term debt. When one quadrant reaches 35%, the fund automatically re-balances. If the government is increasing the amount of Fed Reserve dollars (inflation), decreasing the amount (deflation), or meddling in any other way, one area of the fund will do well. Learn more.

Future

The internet and digital commerce might lead to people use these options as money, as long as they have monetary choice:

1. A basket of minerals (gold, silver, platinum). All stored in different locations, likely near the sources, and digitally collected as a basket. If you wanted to take possession of your money, you  would need to convert the basket into one of the products, otherwise you’ll have substantial shipping charges.
2. A basket of minerals and non-mineral products, such as oil.
3. Shares of a mutual fund
4. A basket of shares from many mutual funds
5. A basket of mutual fund shares and minerals and oil

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