I’m not sure I could find a pint of agave in Iceland for a fistfull of 5000 ISK notes. Well, not right now anyway…

If anybody buys a containerload of condoms, please send me a garbage bag full.

Funny how our vices (to some traditions of thought, anyhow) constitute our best means of exchange.

In terms of trade goods, if I thought it was going to go down that far (and I don’t) there’s only one I’d consider investing in: condoms.

Small, portable, fungible, and people need to get laid. We don’t know how pharmaceutical supply chains will do, but we do know that sex will continue, and condoms are generally a pre-requisite even more so in times of financial crisis when the last thing anybody wants is a pregnancy to content with.

However, I think that we’re going to see a soft-collapse, not a hard crash. There are four reasons for this:

1> One of the functions of the market is to move information. That function can be offloaded on to the internet: think efficient electronic barter exchanges, math trades and so on.

2> Many countries have long memories and strong internal markets.

3> The Euro is likely to stay afloat, more or less.

4> Ultra-cheap solar panels, which will cut the cost of daylight electricity by maybe a factor or four or more, are in mass production - a few gigawatts a year now - but in the medium term (5 to 10 years) the certainty that electricity will continue to get cheaper and cheaper in future will act as an economic stimulus on a titanic, industrial revolution scale.

Interesting times.

Good tips, especially so on the communications.

It may be a few weeks, or it may be longer. Anyone taking this advice should also consider stocking up on something that can be used for exchange should paper money, and hence your bank account, once again return to its intrinsic value (i.e. zero).

This may mean common (at present, anyway) consumables like cigarettes, vodka and diesel, but in any prolonged crisis likely means gold and silver coins.

Gold would actually be too valuable for convenient smaller purchases, so silver is the better way to go. One-ounce silver coins that are widely recognized the world over include the Canadian Maple Leafs, Mexican Libertads, and American Silver Eagles. If you intend to purchase bullion, best do it soon as the premiums on physical metals are currently rising precariously (due to unprecedented demand) and waiting times of 2-8 weeks are already common with all major vendors - including the government mints!

Here are a few reminders of what the reality of a currency crisis will mean for your hard-earned paper money:

http://en.wikipedia.org/wiki/Image:Inflation-1923.jpg

“My father was a lawyer,” says Walter Levy, an internationally known German-born oil consultant in New York, “and he had taken out an insurance policy in 1903, and every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread.”

The Berlin publisher Leopold Ullstein wrote that an American visitor tipped their cook one dollar. The family convened, and it was decided that a trust fund should be set up in a Berlin bank with the cook as beneficiary, the bank to administer and invest the dollar.

(Source: http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html)

PS. Vinay, I’ll give you a pass on the ‘unregulated’ finance industry gag - this time

I saw plenty of really nice buildings, but nothing in the “cheap shelter” category.