True Conspiracy

Brining you the latest news on conspiracy theories and exposing a big web of lies governments and transnational corporations create to fool us.

Sunday, January 28, 2007

Is Barter Soon To Return To US?

I try not to sell bags of US silver coins, because they are damned difficult to store. They're heavy, and weigh 56 pounds. One could store maybe 70 hundred ounce bars in the same space 2 bags take in a safe. Admittedly they are cheap as far as silver is concerned, often below spot. Below spot because there is no manufacturing cost involved. They were all made over 60 years ago. A year from now, a few cents per ounce won't make any difference anyhow, so why burden yourself with a 56 pound bag of US silver coins? I'll tell you why most people buy them, and I think the reason is false.

Barter is the reason. "Well, if it all comes down and the dollar collapses, I'll have a few silver quarters or dimes to barter with," might be a typical explanation for buying bags. Think about it; even if barter did become necessary, which it won't, but more about that later. "What do you mean, a silver quarter? Looks like any other quarter to me, so don't give me that BS about it being worth $5.00. It's a quarter." I can imagine someone with whom you attempted to barter, saying just that. How would they know it's silver? They probably would have never heard of a silver quarter! "Silver quarter? Do you think I just got off the turnip truck? Who ever heard of a silver quarter? Have any gold quarters?" You'd have to be pretty old to remember when quarters, dimes, and halves were made of 90% silver, and when that time comes, if it ever does, you'd have to be bartering with a hundred year old probably…if there're any around. I will be 73 next month, and I was thirty when they made the last silver quarter.

I know, you'd say, "See, there is no copper looking strip in the middle, so it's real silver." The reply would be about the turnip truck, unless the person taking the coin was really in the know, or old as the hills.

Even if you found someone who believed you about silver quarters or dimes, how much silver is in a silver quarter? The coin says nothing about its silver content. It isn't as if it is a one ounce round, Silver Eagle, or Mexican Libertad, which are plainly marked .999 pure silver, one ounce. Or a ten ounce or hundred ounce bar with a good hallmark such as Johnson-Mathy or Englehard, which are also marked as such. Barter with them, and you'll have no problems, because they are MARKED with their contents. You could say that the silver dime has .18 of an ounce of silver, but suppose the coin is worn. How much silver is left? The arithmetical computations necessary for bartering with U.S. Silver Coins are mind-boggling, even if you did know how much silver is in them.

Buy bags because you have endless places to store them, and don't mind hefting 56 pounds, but please…not to barter. Let's talk about bartering. Barter is fine between two people. "I'll give you a hundred ounce silver bar for your Ford," or similar. Barter between two people is great, but if we have an economic collapse, don't count on going to the super market and trading a silver dime for a gallon of milk. That would be impossible, because the super market, corner gas station, furniture store, or electric company can't barter for silver or gold. They couldn't if they wanted to, because they have to pay their bills in dollars or whatever currency there is. You can't write checks or wire in gold and silver, because they are of a different denomination. That's why you bought silver and gold, wasn't it? To get out of failing dollars, and into a different denomination? A denomination that will hold its value (go up in price) as the dollar fails. You got out of the dollar denomination, to preserve your assets. To buy something with dollars, you obviously need to get back into dollars, or have dollars to make the trade. This means selling your gold or silver, converting it back to dollars, and then buying your stuff with the currency in use…in this case dollars. Attempting to short circuit the process simply won't work, except between two agreeable people. Willing buyer and willing seller can trade anything with each other. Buying merchandise from a large or chain business which has to pay its bills in the currency in use, means they can wire or send a check to pay their bills, but they have to pay in currency denominations, not ounces. They are different denominations. Like oil and water.

If you bought your silver and gold from me, and want dollars, all you have to do is call me, and I give you an address to ship to. When it gets there, I send you a check, and no charge. It may take a few days, but I can't help that. If you need instant dollars, try a coin shop, but they will usually never give you as much as will I. Just like you can't mix oil and water, you can't mix dollars and gold or silver. If you could, there'd be no reason to buy gold and silver. You buy gold and silver to GET OUT of failing dollars, so when you want the dollars again, you sell your hedge of gold and silver, and turn them into dollars to buy what you wish.

If the dollar collapses and becomes worthless, they'll invent another currency. One wag says they have already printed new ones, but I doubt it. THERE HAS TO BE A CURRENCY, OR THE CIVILIZATION WILL COLLAPSE. It will collapse because trade cannot be accomplished. People would not be able to buy from long distances if barter was the only way to buy something. If you live in a small town, and want to barter with a local farmer for food; fine and good. If you live in a big city and want to trade your silver for a foodstuff from a market, it would be impossible. How could the market owner pay his supplier? How could he write a check to pay his bills, if there was no currency? How could the filling station pay the refinery for its gas or diesel, if there was no currency? How could the refinery pay the land owner his royalties, if there was no currency? No checks, no wires, and no civilization!

"Barter" is sort of like "buy," in a way. You go to a used car lot and the guy wants $10,000 for a heap, and you tell him you'll give him $9,000. That's barter. If you barter silver for eggs, that's barter also. The well known Barter Theater in Abingdon Virginia came about during the depression when people wanted to see a show but didn't have any dollars. The wise theatre manager took eggs, beef, and carrots for admission. In other words, they bartered with each other. The manager couldn't pay for his film rental in lettuce, could he? No. He had to write a check to MGM or Paramount in dollars for the film rental. All the admissions couldn't be in produce because he had to have enough dollars to pay for the film. It is no longer a movie theatre, but live stage and famous for its productions, two of which I have seen. Still called the "Barter Theatre," but you can't pay your admission with beets and spinach any longer. Only dollars.

Go back to when the dollar was backed by gold, and coins were made of 90% silver, and see the difference. A quarter was automatically silver and a dollar was automatically gold, since they were backed by gold and made of silver. You didn't need to buy gold and silver, because the currency was just as good as gold, backed by gold and convertible into gold. I wasn't necessary. You didn't have to hedge to protect yourself. You didn't have to worry about debasing dollars and non-silver coins. Your writing a check in gold backed dollars, was the same as bartering or sending gold through the mail. All was well. Now, all is far from well, and….guess what? You need me to…protect yourself.

January 25, 2007

Don Stott has been a precious metals dealer since 1977, has written five books, hundreds of columns, and his web site is www.coloradogold.com

Don't Blame Capitalism

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