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Saturday
Aug132011

How are barter exchanges recession resistant? 

Because this is a closed economy, separate from the ups and downs in the cash economy, those businesses participating in a trade exchange often feel much less or even no effect of the same economic recessions that effect the rest of their area.  In fact, sometimes those fully participating in a barter economy can experience an increase in business while their competitors suffer the normal pains of the recession.

Recessions occur when trust in the future value of the currency is compromised and people start spending less, holding on to their cash assets, to protect against that uncertain future... slowing down the economy... or recession.  Because cash is not the means of transaction in a barter/trade exchange but instead the trade dollar currency, not necessarily influenced by the cash world, the level of trust in the trade exchange often remains higher than that of the cash currency world.  Those members of the trade exchange often become recession resistant!

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Reader Comments (1)

I couldn't have said any better myself!

October 27, 2011 | Unregistered CommenterChip Davis

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