The Role of Metal Barter during the Great Depression
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Primitive civilizations were known to rely on barter systems to sustain financial systems at that time. This brings an intriguing aspect to the importance of precious metals in modern times and how they operated in the old days.
Even though the barter system relied on precious metals that were an excellent store of wealth, the system had some inherent flaws. People were in need of a more sophisticated financial system that could bolster economic growth.
But despite this, the barter system and precious metals weren’t completely removed from the financial forum. A prominent economic event from the past century—the Great Depression—can attest to that.
The Great Depression and Money Markets
One of the most significant features of the Great Depression was the lack of money supply. This was a blow to the working population of Americans who lost their jobs and there was no source of income for sustenance. No number of working hours could compensate for their financial needs.
Deflation was also on the rise because the lack of money meant that money wasn’t changing hands fast enough.
While the dollar remained strong, it became less valuable for the working class who needed to pay for utilities to survive. This urged them to turn to alternative financial systems such as barter trade.
This enabled them to bring some money to the table and sustain their dependants. This system didn’t benefit the entire working class across the board but it pulled out those who had skilled services to offer in exchange for basic life utilities.
Bartering for Survival
In order to fend for themselves and their children, working class Americans resorted to farming and horticulture. Their ability to rear livestock and grow crops enabled them to afford food and shelter.
Once their yield was ready, they would trade it in exchange for basic necessities. Bartering was an escape from the economic turmoil of the Great Depression.
Apart from bartering chickens, vegetables, and dairy products, people were also using silver coins as a currency. It’s important to contextualize the circulation of silver coins for that time.
Even though the currency was made from real silver, it was not revered as a valuable asset as it is now. They were used casually as the only remaining form of US currency.
However, not everyone had or could afford to buy land to cultivate. Dire situations pushed people to resort to illegal ways of providing for their families such as selling alcohol. But commodity money still helped them survive because it offered monetary value as well as the consumption value.
What We Learn From This
The basic lesson that this example teaches us is that not everyone was able to live off the land, but those who had it, could. Investing in lucrative assets is the need of the hour in the modern world as well.
The financial situation is volatile and unreliable and the only thing that’ll keep you anchored safely is investing in assets that preserve monetary value. Precious metals are one such asset.
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