Malgus (and others) if I was to lay odds, I’d bet on your analysis. As I said, it’s only some interesting questions that have popped into this aging brain of mine. I do realize after all, that there are relatively few people that remember what “silver certificates” were, and even if some came out of someone’s collection in the attic, they still could not be converted to silver anymore – despite what they used to say. Heck, unless they just luckily happen to have an unknown silver dollar or 50¢ piece in their rolled coins, no bank has access to any silver money anymore. And anyone under about age 50 doesn’t think in terms of gold or silver as money, other than the commercials they see on TV. Now that PMs are not convertible from solid to paper in the U.S. and haven’t been for many, many decades, it isn’t a construct that most (meaning younger) people even have created in their brains.
So, how would it be valued for trade if the economy (and society) broke down – particularly if mass communication wasn’t available anymore? If anyone saw the old TV show “Jericho,” I visualize a scenario like that, where towns are cut off from the outside world in a flash, and suddenly have to play by an entirely different set of rules. If even the “silver” coinage of today is relatively worthless due to inflation, how would people go about determining what amount of silver (or gold) to ask for a given commodity or service, or how much to pay for same if on the buying end? We who’ve lived in a metals-backed system would have an easier time of it, but we’re also a fast-dwindling minority. It may well work, or work itself out, but with no recent history of convertibility, it’s truly a foreign concept to most people today. If mass communication goes down, particularly, it may be quite a while before any semi-standard exchange values are established. No, I don’t truly believe that TV gold hawkers are part of a giant conspiracy, but IF (still a big “if”) gold and silver don’t catch on with a large segment of society in the future, all those personal stockpiles of gold and silver could become relatively useless.
I know the history very well too, of course. But I also know American history pretty well too – and concepts that make sense to me as one of the over-50, and particularly over-60 crowd, don’t make a bit of sense to a younger America. Otherwise, how is a Socialist (capital “S”) making sense to so many? What us “old folks” have just assumed as “the way it is,” doesn’t always happen to be “the way it is” for much younger folks that make up the bulk of the population, and certainly our future. It’s just possible that a pure barter system will develop, with individual negotiations going on over goods and services, without metals having a large part of it in many areas. Perhaps low probability, but I’m still wondering none the less. In the meantime, a primary fundamental in investing is diversification. And I’m sure not ready to count PMs down for the count.