What Happens When Money Becomes Worthless?

The idea of money is pretty simple. We have pieces of currency, like bills or coins, that the government promises is worth a set amount. We use these pieces of currency to purchase goods and services. We have so much faith in this currency that we often don’t even need to see it to know it’s there. From checks to debit cards to credit cards to direct deposit paychecks we rarely see the money we put so much trust in.

So what happens when that trust goes away? In the face of a major catastrophe the idea of money can quickly fade away and those tin coins and paper bills quickly become worth less than what they’re printed or stamped on. If you’re in a true SHTF situation or even worse, facing the end of the world as we know it, people won’t want money, they’ll want good and services themselves.

So what happens when money becomes worthless? The idea is hard to imagine but when you look at societies like Zimbabwe that saw hyperinflation between 2007 and 2009, you can see the slow but eventual move to nearly worthless money. How worthless? At one point a loaf of bread cost around $50 million Zimbabwe dollars. That means if you had a reasonable amount of money, say $10,000 saved in Zimbabwe in 2005 and saved it for a few years, you wouldn’t even be able to buy a single slice of bread in 2008. This can serve as an example to us for what happens when money becomes worthless and a new method needs to step in.

Prices Change Dramatically

The crazy thing about inflation is the drastic and swift changes in price. The simplest piece of news can make the price of an item jump astronomically in a few hours.  Wild price fluctuations happened in Zimbabwe so much that the loaf of bread we mentioned above could double in price in less than 24 hours, then go back down again just as quickly.

Think of it like the stock market, but instead of talking about shares in a company, we’re talking about the goods you need for survival. Thought of that way, it’s pretty scary to think all the savings you have, gold and silver included, could end up being worthless over the course of a few days.

The Meaning of Money Will Quickly Disappear

As prices jump wildly you’ll begin to question if money is worth anything at all. While we all grow up believing money is valuable, dealing with hyperinflation and wildly varying prices will alter that idea pretty quickly.

Society as a whole will have the option to keep getting screwed by the changing prices or accept that money isn’t the answer to get what they need.

Skills and Bartering Become the New Currency

So, if money has no value, what does have value? Goods and services do.

Trading goods and services for other goods and services that you need is called bartering. By bartering, you eliminate the need for money and place real value on goods and services.

This doesn’t need to be a free-for-all system either. Set values can be assigned to both goods and services to make everything fair. For example, a live chicken might be worth 8 hours worth of work, a goat might be worth 40 hours, and so on. By creating this value system, you replace currency (that can vary in value) with goods and services that, barring any major changes, will always have the value inherent in them.

So, by learning tradable skills like farming, machine repair, welding, canning, and other services, you do as much good as you do today by saving money in the bank. By saving these skills up, you give yourself the ability to help a society while getting the goods and services you need.