Silver

I was considering the problem of hyperinflation the other day and it occurred to me that with gold already over $1000 an ounce, it is far likelier that in a post-apocalyptic world, silver becomes a more natural currency. Gold is so valuable, relatively speaking, that it gets driven out of circulation.

This is by no means an original observation; James Wesley, Rawles makes the same point in his book, Patriots. I think it makes a great deal of sense.

This is, of course, after the shooting and looting dies down. But once parties become known to each other and somewhat trusted, trade becomes possible, and assuming there is the reestablishment of a marketplace, coin eventually replaces barter items.

In the short term, of course, ammunition is a better currency -- everyone will need guns and ammo.

I have put aside a few silver American Eagles -- the bullion quality, not the more expensive, collector kind. An Eagle right now costs about $18, which is a slight premium over actual silver prices -- silver closed today at $15.38. The premium can be rationalized very easily -- you get silver in coin form, at a mint-assured purity and quantity -- no need for anyone to weigh it, assay it, etc. It is a premium paid for convenience. The other thing about an Eagle is that it is legal tender. It carries a face value of $1, though, so that's a very unlikely use of it.

I am also considering Canadian Silver Maples -- they are similar to the Eagle in concept, but with one advantage -- they have a face value of $5 Canadian. The Canadian dollar right now is valued at $.9065 American. In other words -- $5 Canadian is worth $4.53. In New England's northern reaches, it is not unusual to see the Canadian dollar used and exchanged. So for about the same price as an American Eagle, you get 4.53 times the face value should you need to go that route. In states bordering Canada, I'm thinking the Maple makes more sense.