An excellent question in from reader Dave. “What use silver coins would be if a currency collapse were to occur in New Zealand?” He writes how he is looking at them as a form of savings just in case they could be used as cash to pay for everyday necessities:
“I’m curious about coins. What is the utility in buying foreign coins – if I want to have a ready source of cash in NZ? (Should bad things happen!) e.g. I want to pay for petrol with Canadian silver coins? Will this work? PS and does anyone really know?”
This is a really great question and one we haven’t directly answered anywhere else before. Although we have written about the pros and cons of silver coins versus silver bars here.
New Zealand Has Never Seen a Complete Currency Collapse
To answer Dave’s P.S. first: “Does anyone really know?” Our answer is “No” – no one can know. As we’ve never had a situation in New Zealand of a complete currency collapse. A situation where we’ve needed to use silver to purchase everyday goods.
Of course that doesn’t mean it couldn’t happen.
But given no direct local historical examples of a currency collapse, all we can do is make a somewhat educated guess.
What Happened Elsewhere During Currency Collapse?
Therefore probably the next best thing we can do is to look to overseas jurisdictions, where currencies have collapsed.
In recent examples, nations that have experienced currency collapse have virtually always turned to a foreign currency to use instead. Such as in Zimbabwe, where the US dollar was mainly used when trust in the Zim dollar was completely lost.
However we are likely nearing the end of the US dollars run as global reserve currency. So perhaps relying upon holding US dollars isn’t the best bet either?
Looking at Zimbabwe we recall reading articles about people panning for gold and exchanging gold for food like this one from 8 years ago: Zimbabwe – gold for bread.
I found this quote elsewhere from the video since the video is no longer available:
“If you need cooking oil, you need to exchange for gold. If you need soap, you need to exchange for gold. Everything is gold gold..no Zimbabwe dollars.” The shops in Zimbabwe didn’t take paper Zim dollars–only gold.
Articles from later dates than the one above talk more about Zimbabweans using US Dollars. Although as this article below says it took a while for US Dollars to be used widely: Zimbabwe after hyperinflation – In dollars they trust.
So in the early days it seems like gold would have been used. Probably barter as well. Along with the South African Rand and then mostly the US Dollar.
Currency Collapse in New Zealand More Likely to be Result of Global Monetary Breakdown
However our guess is that if a currency collapse occurred here in New Zealand, it would more likely be as a result of a global collapse in confidence in the world monetary system.
Rather than simply as a result of government money printing localised just to New Zealand. (But never say never! After all the RBNZ is prepared to print money and implement negative interest rates in a crisis).
As alluded to earlier, we are likely nearing the end of the US dollars run as global reserve currency. Monetary scholar Edwin Vieira has pointed out that every 30 to 40 years the reigning monetary system fails and has to be retooled. It’s now been 46 years since Richard Nixon removed the ability for foreign countries to convert US Dollars in gold.
So in this Case Gold and Silver Would be the Better Bet to Own Than US Dollars
So in the case of a global monetary system breakdown causing a currency collapse in New Zealand, it looks like gold and silver would be the better bet to own than US dollars.
On to the question then about the utility of buying foreign minted coins such as say Canadian Maple silver coins.
How widely accepted would foreign minted coins be?
Your first thought may be that most people on the street today wouldn’t even be able to recognise a Canadian silver maple or an American silver eagle 1 oz coin!
However in a currency collapse situation where trust in all fiat money evaporated, it would be a fair assumption to make that people would learn in a hurry what various coins looked like.
Well known coins from national mints like the Royal Canadian Mint, US Mint and Perth Mint in Australia, would likely be more trusted to be authentic and pure.
Odds are we would also have seen a sharp rise in the number of people buying gold and silver in the lead up. So there would be more knowledge about gold and silver coins than that which exists here currently.
Therefore a Silver Coin From a Well Known Mint Should be a Pretty Good Bet
So the popular Canadian Silver Maple 1 oz coin, that Dave was referring to, would likely be a good bet.
Even if we never see a full blown currency collapse (a bet we wouldn’t want to take), silver coins will still offer protection from the almost assuredly ongoing devaluation of all currencies.
But right now you may also want to consider the Perth Mint Australia 1oz Silver Kangaroos. We have an excellent special on backdated versions of these coins currently.
500 1oz Kangaroos is around $350 cheaper than the silver maples. Odds are these would be just as widely recognised as the maples as well. The Perth Mint is a well known government backed mint globally. It has a high profile globally and is already well known here in New Zealand too.
When buying 500 backdated Perth Mint Australian Kangaroo coins, you’re effectively getting 14 coins for free in comparison to 500 Canadian Maples.
So While Stocks Last These Kangaroos Are the Best Value When Buying Silver Coins
You can see the difference in price between the Maples and the Kangaroos below. Then either click below or go to our online gold and silver shop to request a quote. Minimum order is for 500 coins.
If you’re not already a subscriber of ours then you should be! Our VIP subscribers are the first to hear about deals like this one for silver Kangaroos.
Sign up below or go here to learn more. You’ll also get our free ebook “19 Nuggets of Knowledge on Gold and Silver”.
To learn more about the role gold may play in the global monetary system check out this article: If/When the US Dollar Collapses, What Will Gold be Priced in?
Editors Note: This post was first published 25 July 2017. Last updated 27 August 2019 to include latest pricing on silver Kangaroo coins.