Let’s face it. Our economic system, as complex as it is, depends on the status quo. We’ve all agreed that paper money is worth something, and long since taken the step to using ones and zeros as well. But access to our money is something we take for granted.
Debit cards and credit cards are much easier to use than cash. Yet, if the power grid goes down, they’re just pieces of plastic. In the aftermath of Katrina and Sandy, for example, there was no way other than cash to purchase goods.
In alternate scenarios, such as major banks being bankrupted, it may be impossible to access our money, with or without power.
Cash itself gives us few guarantees. Keeping wads of it under your mattress is reckless, and if the economic system collapses, it will be nothing more than paper.
Bartering: getting back to basics
Long before money was conceptualized, people used to barter. Bartering simply means directly exchanging one thing for another. I give you 8 sheep, you give me a cow. I give you a haircut, you give me an eye test. Values are more subjective than with money, but also more connected to the real world.
Bartering works irrespective of the financial system. Incidentally, this is the reason that bartering has major tax benefits.
So, if and when the world no longer functions as it does today, we’ll all be bartering. We don’t have to wait till that day. It’s important that we have resources or services we can offer in exchange for what we need. And if you master it before it’s necessary, you’ll know how to make the most out of it.
Here’s 3 methods of bartering for when the financial system no longer works.
This is the most basic form of bartering. You meet up with the person who has what you need. You come to an agreement on what you’ll give them in return, and you make the exchange.
It’s a little more complex than that, though. You need to come to the deal with knowledge of what you have available, and how much you think this resource is worth. Not everyone will agree on this. While you may think bread is worth very little, someone else might take into account its importance for basic survival, especially in a scenario in which no one else can provide it.
Obviously, online bartering won’t help you if the power grid goes down. But, if the financial system collapses, or if you decide you want to start bartering while things are still stable, the internet has made it relatively easy. You can find just about anything you need, without too much hassle.
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3. Time banks
Time banks are more sophisticated than other forms of bartering, and more closely resemble our current financial system. Person A wants a massage and can provide dentistry, person B wants a dentist and can trade haircuts, person C wants a massage and can trade mechanical repairs, etc.
A time bank is a system that lets you keep track of what you “earn” from services you’ve provided. You can use those earnings to pay for another service at a later date.
Once again, it relies on people agreeing on the existence of an invisible currency, and can go downhill fast if the rules are exploited.
You need resources
The most important aspect of bartering is that you own something that someone else needs. It should be tangible for the most part, as in a disaster scenario, many intangible services might be completely irrelevant (you won’t need an accountant for example).
Food is the most important resource. You’ll always need it, and you’ll always be able to barter with it. Our micro farming ebook details how you can start a micro farm from scratch, without any prior experience. A micro farm will sustain you, and give you resources with which to barter when money no longer works.