Ammo for Barter – Ammo vs. Money

by Terence Gillespie

The belief that everything is available for the right price is a Hollywood myth that really must go. The Beatles sang better with, “Money Can’t Buy Me Love.”

For some reason, our fiat tokens are still being mistaken for real money. And yet, I haven’t seen .357 Magnum on the shelves in the last 12 months. Maybe that’s why it’s already happening: Ammunition is being used for barter.

Blame who you will. The green shoots of barter have appeared in anticipation of nobody knows what. Ivory tower questions of if and should (ammunition be used in barter) have been answered by the not so “invisible hand” of the market. That leaves questions of efficiency, demand, supply, resource allocation, liquidity and legality. In particular:

• How does ammo compare with money?
• How does ammo compare with other barter items?
• What supply and demand Factors are unique to ammunition?
• Which cartridges are best?
• How much is enough?
• What about reloading?
• Is it legal?

For all its flaws, hassles and lack of precision, barter is a wonderful thing. It gets people talking, needs are fulfilled, the exchange is personal and everyone leaves the table with real goods.

Lately, it appears the real good people want to leave the table with is ammunition.

Ammo vs. Money

We barter when money is not available, money is worthless or when goods are not available regardless of money. Ammo is currently being used in barter because it’s not available regardless of money. However, it's not hard to foresee a time when all three conditions would exist.

Gold and silver are the best money on earth for reasons listed in, “Why is Gold Money?” They have all the key attributes of money and they have them in spades: They score excellent within each category. For instance, gold and silver are not only transportable, they are very transportable. They are not only storable, they are very storable. . .and on down the line with each attribute. Going one by one comparing the attributes of money with ammunition, ammo is:

Transportable: Yes, if kept away from water and shipped within legal restrictions.

Divisible: Only within the same cartridge. Safety would dictate that divisibility be further limited to manufactured lots. Mixing different size cartridges is possible, but seldom done.

Storable: Yes, for about 50 years though with much less tolerances than gold or silver. Ammo can be destroyed or unpredictable if wet. Performance can also vary with ambient humidity. Storability is on a par with wheat.

Fungible: No. It has divisibility by cartridge but no fungibility.

Resilient: Yes, though with much less tolerances than gold or silver. Ammo in water can not be trusted: Brass rusts while primers decay unpredictably. Ammo is about as resilient as a large can of beans: Once it’s dented, less people trust it.

Measurable: Yes, within the same cartridge where components are consistent.

High Unit Value: Yes, with values just above copper and lead though far below silver and gold.

Desirable: Yes, but not universally. Desirability is limited to those in charge of security, hunting or those aware of a gun’s wide range of utility. If the need for security grows the desire for each family to have some amount of ammunition will increase.

Rare: More and more each day.

Hard to Counterfeit: No. But non-functional copies that pass muster are almost as expensive to make as a functional round.

So, ammunition is transportable, storable, resilient, measurable, has a High Unit Value, and is increasingly Desirable and Rare. However, Divisibility is limited to cartridge and there is no Fungibility. Counterfeiting is possible, but, non-functional copies that pass muster are expensive to make.

Ammunition has 7 out of the 10 attributes of money. However, it does not perform nearly as well in those 7 attributes as does gold and silver. If we hold ammunition to the same standards as gold and silver then it would be used as money only on a supplemental or transitional basis.

The most acceptable forms of tradable ammo would be cartridges in wide demand, manufactured with consistent and trusted components and transported and stored in a manner to keep it from coming into contact with water. The end result being a half-dollar (Or .45 ACP round, in this case) that you could use to buy a pack of gum with in the morning or shoot a rattlesnake with in the afternoon!

If that’s how Ammunition measures up against gold and silver how do Federal Reserve Tokens (dollars) measure up?

Dollars vs. Money

Dollars are transportable, measurable and storable on a par with paper cut into uniform pieces. They are not divisible, fungible, resilient, desirable or hard to counterfeit. They do not have a high unit value and are rare on a par with the stars in the sky or the sand at the beach.

Dollars have 3 out of the 10 attributes of money, performing poorly within those attributes. If we hold dollars to the same standards as gold and silver the dollars would be used as money only if a government forced their acceptance at the point of a gun.

The ammo in that gun would be a far superior form of money than the dollars they enforce.

Reverse Ammo Multipliers

A disastrous economy combined with an increasing awareness of the need for security is causing ammo to fly off the shelves. The inability of manufactures to keep up with demand is making the lack of supply visible. And California’s recent ban on the importation of ammunition and our growing distrust of the victim disarmament gang is not exactly quelling demand.

All these factors are ricocheting off one another and imparting to ammunition two of the key ingredients of money: Desirability and Rarity.

Another reverse multiplier is the falling dollar amidst surging commodity prices. This dynamic duo is imparting to ammunition a third key ingredient of money: High Unit Value.

Ammunition Deflation

If ammo were being used as money, today, we’d be in a deflationary period.

The ammo presses are not physically able to “print” enough. What ammo is being printed is quickly purchased and shot off or saved for the future. The only banking system is in personal physical storage where owners do not loan it back into the money supply. That takes it completely out of circulation.

To make matters worse the ammo that is shot off is only partially recycled to bring it back into the money supply. And more and more new gun owners are buying their first 200 rounds to practice with their favorite new security tool.

The net effect is that one unit of ammo can now purchase more goods and services. If you had been using ammunition as money and savings you would have tripled the return you received on the equivalent amount of dollar savings over the last year.

In fact, if you substitute ammo for dollars it turns out the deflationists were right!

October 23, 2009

Terence Gillespie [send him mail] has worked at IBM, played jazz piano on cruise ships, is an instrument-rated pilot, songwriter, and is attempting to optimize every aspect of life one article at a time on his blog at YourOptimal.com.