Making money when money is worthless?

Question

How does anyone stay afloat when the whole U.S. economy fails? Say a major Stock Market crash and the money notes become worthless. When people are using the "barter" system. How does anyone continue to make money?

Yeah but "Brandon A", should I convert my money into actual Gold? Would it be safer than stuffing dollar bills under the mattress?

Answer 1

You have a real deep question, we have had some pretty bad times in the country, the stock0ck market crash of 1929, the recession of 1957, the floating of the American dollar against other currency's through out the world 1972, the devaluation of the American dollar against the world currency's 1973, Interest rates the highest in America ever at almost 20% in 1980These have all been handled in different ways, but the resilience of the American people is amazing. they drew to gather soup kitchens, food banks. There were also a variety of government programs that kicked in, like WIC, food stamps, AFDC, People will still go to work they just will need a wheel barrel to bring home their pay check. This is a lot like it is today, let me explain when I was a boy a family of four averaged about $4500 to $5000 a year and today we are looking at that same amount of money for a month

Answer 2

The money notes won't become worthless just because the stock market crashes. Why would it? There've been plenty of stock market crashes in US history, and the US dollar has never yet become worthless.

People still need a medium of exchange no matter what happens to the stock market or to the economy, and the dollar is it. In fact, if you're worried about the economy you'll be eager to accept all the money you can get your hands on, you won't be turning it away.

You think someone running a grocery store will just spontaneously start refusing to accept dollars because of a stock market crash? You think the store will just turn away shoppers, refuse to collect their money, and let the inventory spoil? How then do you think the grocery store will pay its own bills? Of course they won't quit taking money, that's all nonsense.

Answer 3

Money supply is determined by the Feds. Stock Market prices falls does not affect the value of the dollar much. When exchange rates vary the prices of importing become cheaper or higher because of trade. Finance is different aspect, and stock prices has not much bearing on the the money supply. A dollar lose value it will mean comsumer goods are more expensive for imported goods, but the effect is marginal most times, and its complex question. Stock Market had the hiccups, and will recover the losses in the next few months anyways.

Answer 4

Money is only money because our government says its money and we accept it. There is between 1 and 2 cents worth of 'real' money behind each dollar bill. The other 98 cents is really credit. How does this happen?

You put 1 dollar in the bank. The bank keeps 20 cents in reserve in case some depositors want to take their money out of the bank. The other 80 cents the bank rents out to another customer (say someone with that bank's VISA card). The bank will expect to get the 80 cents back plus the rent (interest) for renting the money.

Now, some event takes place that causes people to lose confidence in the banks or the government. Back in 1929 it was the stock market crash. Today it could be a terrorist attact. Anyway, people run to the bank and demand their dollar back. But wait? The bank only has 20 cents. Would you accept 20 cents instead of your dollar? How is the bank going to pay you? They call in all of that money they lent out immediately! Could you pay back ALL of the money you owe RIGHT NOW? Would your grocery store take 20 cents for a dollar's worth of groceries? Chaos!

Give some thought to what you have that someone would accept instead of money in exchange for things you really need, like food. If the 'money' is no good, what is valuable? Some things that have turned out to be valuable in 'moneyless' societies in the past: liquor, gold, jewelery, cigarettes, guns, amunition, sugar, flour, fresh fruit, etc. Really makes you think doesn't it?

Answer 5

Savings that you can live on for a while. Not associated with the stock market.

Answer 6

Yes, you have to have your money in actual gold. It is not safe because a lot people will know that the money is in the houses not in the bank any more

Answer 7

draw a square.....put 4 playing cards at each corner..a,b,c,d
then 3-and 2 in each line.L1,L2,L3,L4
when you count each line cards they will be 13 in each line.
totall will be 36
.....read care fully.
pyt 1 card in line L1,...now L1 has 14 cards,L2,L3,L4 has only 13.
remoove one card from corner a and put it in L2,...........here comes the us market logic.........now count each line again. all lines will be having 13 cards.....but the total will be 37.........you can put up to 12 cards......and all of them will be disappear...line count will b the same but total will increase..that disapearance of card is the key .hope you understand the market