We’ve been discussing the economic fallout of an EMP (electromagnetic pulse) attack…
How to thrive in the cashless, barter-and-trade economy that rises from the dust…
And how to protect your family’s livelihood when money, as we know it, no longer exists…
But even if you control an in-demand commodity, you still have to know how to actually barter.
Otherwise, you’ll find yourself shortchanged at every turn and could even put your family in danger.
Here are four of my top tips to help you thrive in a cashless economy.
Bartering Tip #1: Be Selective
In short, only trade for items and services you actually need.
Folks will try to trade all kinds of pre-collapse junk for food, water and other items they need to survive.
You might be tempted to take them up on their offer — either out of pity or because of the value the item used to have in pre-collapse society.
But to survive in the new economy, you’ll need to barter with your head, not your heart.
Only trade for items you know for certain that you can use.
You can also pick up items to trade elsewhere, but be sure there’s actual demand for the item before you buy it.
Bartering Tip #2: Keep Your Cards Close to Your Chest
Never let on that you have a plentiful store of items to trade.
If you do, you leave yourself open to attack by gang members or folks who are desperate for food.
Even if they are someone you regularly trade with and trust, keep that info to yourself.
Word travels fast about folks who have more than others. And it won’t be long before it reaches the ears of someone who’s looking for their next big score.
You can lower the risk of attack by trading only at markets — never from your home.
And you should never let anyone know details about your stock.
When people ask for an item you have in store, don’t say, “Oh, yeah, I have a bunch of those at home.”
Tell them you haven’t got any on hand but you might be able to get some in a few days.
Bartering Tip #3: Get It in Writing
There probably won’t be much in the way of law and order after the collapse.
But it’s likely that some sort of community system for trial and punishment will be cooked up to keep people in line.
In that event, it will be important to protect yourself by putting big trades down in writing.
That way, folks won’t be able to accuse you of stealing their goods.
You don’t need anything fancy — just a bill of sales with the details of the transaction. One for you and one for your customer.
Your customers won’t mind signing once you explain to them that it protects them too.
Bartering Tip #4: How to Price Items in a Barter Economy
The main problem with pricing items in a barter economy is that there’s no longer an underlying currency to base value on — like the dollar.
When something costs $5 and I have $10, I know I’ll have $5 left after the transaction.
And I know that $5 will be worth $5 in the next store I go into… and the one after that.
But if someone wants to trade some gasoline for some food — and I have apples, rice and some unripe bananas… well, now things are a little less straightforward.
Folks have written whole economics books on this idea, filled with overly complicated equations and charts that would make your head ache.
But the whole thing can be boiled down to two ideas:
- Supply and demand. Quite simply, if demand is high for a product and supply is low, you can charge more for it.
On the other hand, if there’s a lot of a certain commodity on the market, you’ll want to price it low (to stay competitive with other folks who are selling the same).
It might take a while to get a feel for the ins and outs of the post-collapse economy. But if you pay attention to what folks are asking for and what other traders are offering, you’ll have it locked down in no time at all.
- Think of a common item as your “currency.” If you need to do some appraising on the fly, try to think of trades in terms of a common item that you trade with regularly — like apples or rice.
For example, instead of trying to work out how many pairs of socks equal a sleeping bag, you assign both products an “apple value.”
If a pair of socks is worth five apples and an old sleeping bag is worth 30 apples, then the sleeping bag is worth six pairs of socks.
Obviously, this is a simplified example, and bartering won’t always be that cut and dry. But it’s a good rule of thumb to work by.
It will help you estimate an item’s worth instantly, so you’re won’t fall victim to a crafty trader.
As always, we welcome feedback from our readers. If you agree, disagree or have any topics you’d like us to investigate, you can email me right here.
All the best,
Editor, Money & Crisis