The dollar becomes worthless when the zombie apocalypse hits


If you are a fan of The Walking Dead, here is one thing you never saw— a character pulling out a wad of dollars to buy something. And that’s actually a feature of any real zombie apocalypse of TWD severity— the dollar will become worthless. Why? Because the US dollar, like other global currencies, is fiat currency. It’s money because the government says it’s money. But when the government collapses because of the zombie threat, who is going to trade food or survival supplies for your fistful of dollars? No one.

Once the zombie apocalypse is truly upon us, we will have to rely on barter. John has a large supply of bullets, Maisie has a large supply of bags of split peas. They swap. Mike has a spare milk goat, Barry has a crossbow. And so on.

Some people may be able to trade their work for food. Christie the mom goes to Bill the dairy farmer and offers to do hand-milking and other chores in exchange for some of the milk. They work out how much work is required for a gallon of milk and make the deal. A dairy farm will probably attract quite a few laborers who will work for food and a spot in the barn to sleep. And they will need the labor once the fuel and electricity supply is out.

After people get more settled— when they know where their next meal is coming from— people will want the benefits of a cash-based economy. They will want a wage that they can spend on what they want. Most likely, the new money will be gold.

During the survival phase, no one is going to trade you a bag of corn for a bunch of gold coins. You can’t eat gold. But once people either learn the skills to hunt or grow their own food, they will want other things, and a means of exchange is more convenient than barter. In barter, the person who has the thing you need may not be willing to take what you have to offer for it.

Gold IS money, in a lot of ways. Survivalists and independent types often keep a supply of gold coins on hand in case of a crisis. So it’s going to happen that some people are going to start taking a risk on the value of gold coins. Initially perhaps on items for enjoyment, such as an antique table or a piece of jewelry. Only after gold coins start being traded regularly will you be able to buy essentials— like a new gun— with it.

The trading value of gold will fluctuate wildly at first. People who didn’t understand economics probably didn’t even take gold coins when they found them in abandoned shops or homes in the beginning. They were more concerned with finding food and ammo. But once gold coins have value, people will be finding gold coin hordes, and each discovery of large amounts of gold coins to come into circulation will lower the value of other gold in circulation.

This will disconcert those who believe in gold and the gold standard, but similar things have happened before, as when the Spanish brought home the gold treasures of the New World. That lowered the value of the gold already in circulation in Europe. But economies adjust to fluctuations in the gold supply. In time gold will become the currency of choice in the zombie-haunted world.

What about silver? They are always hyping silver on TV as being almost as good as gold. Well, it isn’t. Silver fluctuates wildly as sometimes silver is a popular investment and sometimes it wasn’t. Silver can boom and bust to an extent that gold can’t. After a gold economy is established among survivors, silver may be desirable for small purchases. But it will be difficult to establish how many 1 0unce Silver Eagles it would take to trade for a one-tenth ounce Gold Eagle coin. The exact amount will ultimately be determined by local communities of survivors. And they may not take other silver, such as historic coins, as they would take a common Silver Eagle (minted by the US government, as are Gold Eagles.)

Is there a zombie apocalypse novel in your future? If so, how will your characters deal with the probable economic collapse?


A blog post I read today

GirlZombieAuthors: Dr. Bowen Mystery, AuthorFest! The blogger, C. A. Verstraete, is the author of Lizzie Borden, Zombie Hunter and has a new book out involving Dr. Bowen, Lizzie Borden’s doctor.

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2 thoughts on “The dollar becomes worthless when the zombie apocalypse hits

  1. Thanks for the mention! Interesting post, too. i wonder how many people actually have a gold stash at home, especially now as burglaries (at least in the Chicago-Northern Ill. and Wisc. region) continue to rise…

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