In 1933, at the height of the depression, an unemployed, broke, actor, by the name of Robert Porterfield, tried something new, to keep himself in food. He took an old movie theatre in Abingdon Virginia, (It had a stage too) and offered plays to the public, for anything they had to give, as an admission price. The name “Barter Theatre” stuck, and it is still going, with famous actors and actresses playing the house regularly. I last went to a production there in 1998. One day a year, the Barter Theatre offers a show for literal barter, to keep the memory alive. Back in the depression, most people brought home-canned goods to go to the plays, but one guy bartered a live hog, and once a fellow offered a dead rattlesnake, and was admitted. This was true barter. However, there were no movies offered, as the film companies wouldn’t take put up tomatoes, as rentals for their flicks. This was stage acting, not movies. Barter has its limits, in other words.
We all barter every day, in some way or other. We offer rewards to our kids for good grades, or might take them somewhere as a reward for good behavior. We offer a meal to a stranger for work he may do in the yard, and the homeless, many times, are given a meal and a cot to sleep on, if they go to worship service. This is barter also.
e-Bay is barter. Paper money offers for goods, and the bidding goes on till a certain time, and the sale is completed. This is barter. Auctions are barter, with the auctioneer taking bids, till he says, “sold.” When you haggle with a used or new car salesman, you are bartering your paper money or credit worthiness, for his car. This is also barter, and if thought is given to the bartering process, it goes on daily, and in every sector. Romance is barter! The good looking guy gets the best gal he can get, and vice versa. Do women primp, get tanned, keep slim, and dress well, for their own benefit, or to get the best guy? Doesn’t a single guy buy that sports car, and make himself attractive in every way possible, to get the best gal he can? When a person is applying for a job, do they always dress for it, and preen their qualifications? This is also barter, only as an indirect form. We all do the best we can, with what we have to offer.
The dictionary definition of barter is, “to exchange goods or services without the use of money.” Most of the above situations fit that description, although a broad, general definition, would be “bargaining,” I believe.
So why am I getting into this? Quite simply, because a lot of precious metals holders believe, that at some future date, they may have to barter their tangible wealth, for physical goods to survive. I do appreciate the theory, and understand that the currencies of the entire world are going down in value, and for the first time in history, none seem to be backed by anything. The possibility exists, that all may go kaflooey eventually, and become worthless, making us all barter to survive. I consider that possibility so remote, as to be almost impossible. Why? Follow me and my thoughts, which I consider to be logical, not emotional. Emotions say that it will happen. Logic says it is close to impossible.
Go back to the Barter Theatre in 1933. The dollar was sound, and backed by gold. The coins were 90% silver. Barter became a necessity, because no one had any of them. The depression put 25% of Americans out of work. The money in circulation was good, but hard to come by. Some industrious Americans thought of a way to survive by bartering. There was no way to write a check for canned strawberries, nor could one wire a live hog to a distant city, to pay for needed goods. Film companies needed dollars for film rentals from theatres, to pay for production costs, salaries, transportation, and all that goes with motion picture film production and distribution, and no form of barter could possibly work. The Barter Theatre, bartered for stage talent, and not films. The projection booth went unused, although it is still there.
Currencies are necessary for a civilization to carry on. Think about it. Could you barter a can of hominy for a quart of motor oil at a gas station? Possibly, but the proprietor of that gas station, has to purchase his oil from the distributor, who has to purchase it from the refiner, and the refiner has to pay for the oil from the well owner, etc. This all takes transferable currency, in the form of checks, wires, or physical cash.
Take the super market, which furnishes our food stuffs. How could a super market barter for anything? Their profit margins are 11% on average, and the food field is highly competitive. The super market manager must pay for his food from the warehouse or supplier, with dollars. Dollars, in the form of checks written on bank deposits, and mailed to the supplier, or given to the truck driver upon delivery of goods, which is known as C.O.D. (cash on delivery).
There are millions of items for sale every day, from various locations, and hundreds of millions of buyers, in different locations. All want different things, in different quantities or qualities. They want different colors, weights, sizes, or viscosities. They want appliances of different sizes, and brand names. They want different sizes of tires, or boxes of Rice Krispies. Hundreds of millions of consumers, want millions of items from retailers, wholesalers, manufacturers, distributors, or jobbers. They want different gasolines, brands of cars and trucks, and thread counts in sheets they sleep on at night. Commerce is a wonderful thing, but could not exist without currency. Without currency, we would be back in the stone age instantly. When you buy gold and silver from me, (palladium is a great buy now) can I take your peach butter? No, because you live in Hawaii, I live in Colorado, and the metal may be shipped to you from California, Utah or New York. You send me a check, and I send a check to my supplier. How could barter ever work beyond arm’s reach? It can’t.
Well then, why do we buy gold, silver, and others? We buy them, because the currency may be necessary, but it is unbacked, basically worthless, and is self destructing with all due dispatch. (We should buy palladium, because it has gone from $1600 an ounce, to $180, and looks great to me, as a way to “make money.”) I don’t like what is called “money,” as I think it is a gigantic fraud, perpetrated by self serving politicos, who use this sham, to deceive and get re-elected. We buy gold, silver, (and palladium?) because we want out of dollars, because dollars are a failing measurement. That’s why. At some future date, when the dollar fails more, we will have “hedged” ourselves. We can sell the gold we bought at $350, for $1,000. If we had placed the $350 in the bank, it would bring $375, because of interest, while gasoline would have gone from $1.75 to $6. Butter would have gone from $2 a pound to $6.50, and every single thing we buy, would have perhaps tripled in dollar price or more, without limit. We would have preserved our assets. But to think we will have to barter for our very existence, to me, is a virtual impossibility, because it simply cannot work beyond arm’s reach.
As the dollars go down, a new one will be invented. As the euros, francs, pesos, yen, or whatever, go down, they will be replaced by more frauds I am sure. But the fiat will be transferable to distant cities by check or wire. How does one give change, when one offers a one ounce silver coin, for a pound of meat? How is the butcher supposed to pay for the meat? It simply cannot work. When the colonies were first established almost 400 years ago, they used British, French, and Spanish paper money for trade, not gold and silver. As they got on their feet, they established their own currency, known as the Continental Dollar, which of course, eventually became worthless, giving us the phrase, “Not worth a Continental.” Maybe “Not worth a dollar,” will eventually come into being, I don’t know. How about the phrase, “Save your Confederate money boys, the South will rise again?” Actually, a genuine Confederate bill is worth more than its face value because of its antiquity, and the South has not risen again, unfortunately.
Protect yourself, but don’t count on bartering.