Scott emailed me with information about his new business called PayWithAmmo.com. It is an online marketplace/auction website for firearms and related products and services.
The difference between it and other sites, such as gunbroker.com, is that all transactions are done in ammunition. You can either pay the equivalent dollar value at an exchange rate set with the current price at Ammoman.com or ship 9mm ammunition. The ammunition must be new, brass cased, boxer primed, FMJ and in the designated grain weight (115-124 grains for 9mm ammo).
I asked Scott why he thought this was a better system than using dollars:
All ammo must be new, brass cased, boxer primed, FMJ and for 9mm the bullet must weight between 115 and 124 grains.
The benefit of selling in ammo and not dollars is that ammo is, like gold, is “real” money, that is: 1,000 rounds of 9mm will always be 1,000 rounds of ammo and 1oz of gold is always 1oz of gold; there is no inflation or depreciation. Thus, if a particular rifle is presently valued at 5 thousand rounds of 9mm, all things remaining equal, next year the rifle should still be valued at 5 thousand rounds of 9mm. In dollar value, the rifle has to have “inflated” in price due to inflation, (more dollars needed as value of dollar declined), even if the list price has remained unchanged.
Sites like e-gold cost money as there are storage costs and if someone were to take delivery of the gold, once in their possession, gold has no intrinsic value except as a paperweight.
Pay With Ammo (“PWA”) seeks to provide a solution to those who rather invest in a commodity that has an inherent value, ammo.
The problem is ammo, unlike gold, doesn’t have a ready secondary market to convert back into dollars. Thus, PWA, would like to provide a means for a person who has made a sizable investment in ammo to be able to trade that ammo for goods and services. If PWA takes off, ammo can become a somewhat “liquid” asset that can be used when needed to acquire goods/services.
It is not hard to sell gold and gold does have industrial uses such as in electronics, medicine and jewelry although the demand and price of gold far exceeds that of its industrial uses. On the whole I agree with Scott and I like the concept he has come up with.
I also asked him what happens if an odd number of rounds such as 27 or 219 are the price of a good or service on the website:
Right now, if someone swaps dollars for 10, 20, or even 50 thousand rounds of ammo for personal use, they are pretty much stuck with it. With PWA, however, they can swap a couple thousand rounds for a new gun, accessory or even a service…the options are basically limitless.
If something is priced at less than 500 or 1000 rounds, if someone doesn’t have the ammo on hand and ready to ship, they will just have settle the account in dollars at the daily exchange rate.
I will be keeping my eye on the website to see how it progresses.