I say “in today’s world” because ammo is mostly only used occasionally by recreational shooters who are not constantly using it to put food on the table or for self defense. Therefore, it has no real intrinsic value (except for the cost to replace it).

In the event our world changes to the degree that people are having to constantly depend on guns for their safety and food then ammo will truly be “worth its weight in gold..” for at that same time there won’t be any large-scale commercial ammo manufacturers (except gov’t. run) to supply it to the public. Look for a new cottage industry to spring up—home ammo reloaders–and the associated problems that will come with that–under/over-charged rounds, mis-fires, etc.

It’s an intresting proposition, but in the world we live in today it simply cannot work. Additionally, it’ll take at least a generation (probably longer) for our current “system” degrade to the point that ammo would become universally acceptable as currency.

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I’m not confused about anything. Ammunition is a poor medium of exchange for the reasons I pointed out and many others. Your 50,000 rounds of ammunition is worth varying amounts of money in different years, and at least in the past few years that value has changed dramatically, much more than the modest rate of inflation. I bought almost 1,000 rounds of 7.92X57 in 2004 for $65. That ammo now is worth far more than that now simply due to supply and demand. Ammo is not analogous to gold.

Ammo is only of value to shooters ultimately, and hundreds or thousands of rounds are really only of value to high-volume shooters. The market is therefore artificially limited. Therefore, 1000 rounds of ammo is only worth 1000 rounds to a shooter. I can’t take the ammo to the gas station to buy a tank of gas, nor can I put the ammo in my bank and earn interest (admittedly low interest right now) on the money. I can’t buy a birthday present for my kid with it without trading it to someone else for money or in kind for the gift, if I’m lucky enough to find someone who wants to trade an Xbox 360 for bullets.

If your system really worked, barter of all kinds would be far more prevalent than it is now. The bottom line is that cash is still king.

If diversification is the big advantage here, why not trade in gallons of 87-octane gas? At least more people can use it!

I think the website concept is an interesting idea, and a certain number of people with a lot of ammo on their hands but no cash may use it. Only thing is, if you are a seller, are you really going to accept 7100 rounds of 9mm in exchange for an AR-15? Unless you are in Delta, you aren’t going to shoot that much in a year.

Very truly yours,

Interested Reader

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“For example, using the CPI, 1000 U.S. dollars in 2006 would have the purchasing power of only 975.61 U.S. dollars in 2007″

should read

“For example, using the CPI, 1000 U.S. dollars of goods in 2006 would cost 1028 dollars in 2007.”

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You are confusing the price of ammo in dollars with ammo itself. 1000 rounds of ammo will always be 1000 rounds of ammo; it doesn’t inflate or decrease in quantity (unless you shoot it up). The point you are making is the price of ammo in dollars has skyrocketed in the past year but the price of firearms has decreased in dollar terms. However, if you had 1000 rounds of 9mm last year, you’d still have 1000 rounds of 9mm today.

In the U.S. dollar system, which is a “barter system limited to one item on one side of the transaction” inflation erodes the purchasing power of 1000 dollars. For example, using the CPI, 1000 U.S. dollars in 2006 would have the purchasing power of only 975.61 U.S. dollars in 2007.

The quote in the post above, “Thus, if a particular rifle is presently valued at 5 thousand rounds of 9mm…” is therefore true as it is qualified by “all things remaining equal” i.e. supply and demand. Given the wars, demand for ammo has continued to grow, and given the faltering housing wealth of Americans, the demand for used guns has decreased pushing down the price in U.S. dollars. The increasing supply of used guns has also helped to push dollar prices down.

With fiat money, such as the U.S. dollars, even if supply and demand remain in equilibrium, “all things” cannot remain equal as inflation causes 1000 dollars to have less purchasing power regardless of underlying changes in supply and demand. That is why a gold or a gold backed currency is so attractive as a medium of exchange. PWA hopes to make ammo a similar type of medium of exchange.

Interested Reader, in your example above, it is clear that demand for ammo has grown, so it now takes more U.S. dollars to buy the same amount of ammo and as demand for used guns has collapsed, it now takes less dollars to buy them. But that is true only if you think in terms of our U.S. “barter system” of dollars.

Changing your definition of “barter currency” changes the result. That is, using the example of ammo versus used guns, and when thinking in terms of wealth, if you had 50 thousand rounds of 9mm last year and still have 50 thousand rounds today, then: (1) your wealth in ammo has remain unchanged; (2) your wealth in dollars has increased; but (3) your wealth in Japanese Yen has gone down.

With PWA online, it offers another avenue for American families to diversify out of dollars and invest in something which has a more meaningful use than gold/silver/or other precious metal.

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I am a fan of Ammoman.com, this makes that firm the “gold standard” for pricing ammunition!

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