The risks of disinflation and deflation

From an article in The Economist:

WHAT is a central banker’s main job? Ask the man on the street and the chances are he will say something like “keeping a lid on inflation”. In popular perception, and in their own minds, central bankers are the technicians who squeezed high inflation out of the rich world’s economies in the 1980s; whose credibility is based on keeping it down; and who must therefore always be on guard lest prices start to soar. Yet this view is dangerously outdated. The biggest problem facing the rich world’s central banks today is that inflation is too low...

The most obvious danger of too-low inflation is the risk of slipping into outright deflation, when prices persistently fall. As Japan’s experience shows, deflation is both deeply damaging and hard to escape in weak economies with high debts. Since loans are fixed in nominal terms, falling wages and prices increase the burden of paying them. And once people expect prices to keep falling, they put off buying things, weakening the economy further. There is a real danger that this may happen in southern Europe...

What’s more, too little inflation will undermine central bankers’ ability to combat another recession. Normally, during a period of growth bankers would raise rates. But policy rates are close to zero, and central bankers are reliant on “unconventional” measures to loosen monetary conditions, particularly “quantitative easing” (printing money to buy bonds) and “forward guidance” (promising to keep rates low for longer in a bid to prop up people’s expectations of future inflation). Should the economy slip back into recession, the central bankers will find themselves unusually impotent...

More at the link, and in this companion article.

The rising cost of cancer drugs

"Cost of one month of treatment for an adult for each new cancer drug approved by the United States Food and Drug Administration, based on Medicare reimbursement rates and by year of drug approval."

Graph from Memorial Sloan-Kettering Cancer Center.   The following text is excerpted from an excellent article ("The Cost of Living") in New York magazine:

...the unspoken rule in American health care is that doctors should never consider the cost of a medicine that might be beneficial to patients. When the FDA approves a new cancer drug, it analyzes safety and effectiveness only. Medicare is obliged to reimburse payment for the drug, and private insurers in most states must cover the cost. Any doctor who considers cost—or the value of a costly drug—risks being accused of “rationing” health care...

What is sobering about this booming business is that, as a group of oncologists wrote earlier this year, “most anti-cancer drugs provide minor survival benefits, if at all.” They often (but not always) reduce the size of inoperable tumors, but they rarely eradicate the disease. For relatively uncommon malignancies like testicular cancer, some forms of leukemia, and lymphoma, drugs effectively cure the disease; for the common “solid tumor” cancers (lung, breast, colon, prostate, and so on), which account for the vast majority of annual cases, drugs buy some time—precious time, to be sure, but time usually measured in weeks and months rather than years...

...the average price of cancer drugs has gone “through the roof,” according to George W. Sledge Jr., former president of the American Society of Clinical Oncology. “What predicts the price of the next cancer drug is the price of the last cancer drug,” says Bach. “The only check on the system is corporate chutzpah.”..

A lot of what determines the price of cancer drugs can be attributed to the byzantine economics of health care: markets that don’t behave the way “real world” markets do; artificial price supports that are called something else; government regulations that remove any downward pressures on pricing; and, until Medicare reforms kicked in, in 2005, arcane reimbursement policies that actually rewarded oncologists who used higher-priced drugs, because it would increase the profit margins of their practices.

...the chart documents a recent sea change in pricing. It shows a very slight uptick in prices until the mid-­eighties, when the rise becomes more substantial, and then bends sharply upward around 2000. Beginning about twenty years ago, the graph also shows a series of dots way above the curve of average prices, indicating drugs that, in effect, have broken the sound barrier on price since the nineties.

“Then one day I looked at the whole landscape,” Bach recalled, “and thought, Huh, I now know why cancer-drug prices are so high. Because the entire regulatory environment is structured in a way where there are no downward pressures and there are no standards. Medicare—and most private insurers, who want to do business in most states—have to include every drug in coverage. And they have to pay the producer’s price. It’s kind of that simple.”..

“There is a number in people’s minds,” he says. “If you say to people, ‘I have a drug that extends life by one day at a billion dollars; shouldn’t we as a society pay for it?,’ I’m pretty confident most people would say no. If I say, ‘I have a drug that extends life by three years at a cost of $1.50,’ I’m pretty confident everybody would say, ‘Of course!’ Somewhere in there is a number, a tipping point, where we say, ‘No, we can’t.’ Right now, we’re unwilling as a society to explore where that point is. And I would argue that we have to. Wherever it may be, we have to find it.”  

This is why there will always have to be "death panels."

More at the link - well worth the read.  Via The Incidental Economist and The Dish.

Why a "pap smear" can cost a thousand dollars

It may not be just a pap smear - it may be a bundled set of tests, as explained in an editorial in the New England Journal of Medicine:

The first time a patient called me to say that she'd been billed more than $600 for her Pap smear, I was sure it was a mistake. The second time, I was less sure, and these days I am no longer surprised to find laboratory charges of $1,000 or more for a test that until recently cost only $20 or $30...

It turns out that the high-ticket screening tests contain multiple items: the Pap test itself, usually in the form of a new liquid-based test rather than the older (and cheaper) slide test; a human papillomavirus (HPV) test, which is recommended only for women 30 to 64 years of age and only once every 5 years; tests for sexually transmitted diseases (recommended routinely only for women 15 to 25 years of age and those with symptoms suggestive of an infection); and sophisticated laboratory tests for a variety of yeasts, the presence or absence of which was once assessed by the physician looking at a slide under a microscope. So how do all these tests come to be ordered for healthy women who come in only for an annual gynecology exam? The answer is that someone, whether the physician or nurse practitioner or the medical assistant processing the specimen, checked off all those boxes on the order form...

Laboratories have learned that one easy way to increase revenue is to make it easy for clinicians to order more tests. In the past year, I have been visited by multiple laboratory representatives touting “improved” tests, virtually all of which involve combination panels that can be easily ordered and that contain extensive lists of fairly esoteric tests. The single-vial women's health test is being heavily marketed by multiple laboratories. It includes not only the Pap and HPV tests but also tests for multiple infections — including some we would rarely have tested for in the past — for which we often have no evidence of benefit. Costly tests that once would have required physicians to submit multiple collection vials and specimens can now be ordered with the Pap smear simply by clicking a single box in the electronic medical record. Nothing at any point along the way alerts either the clinician or the patient to the high costs of these tests or to the fact that there is little medical evidence to suggest that they are useful for most patients. It seems harmless, even possibly beneficial, to run these additional tests, and for our staff, it eliminates the risk of missing a test the doctor might have wanted to have run. The risk it poses, though — the one I face when a patient calls about a crippling bill — is that more and more women may choose not to undergo screening, afraid of the financial consequences.

More at the link.  It's an important concept to understand.

One factor that bloats the cost of American health care

From the Washington Post:

Unknown to most, a single committee of the AMA, the chief lobbying group for physicians, meets confidentially every year to come up with values for most of the services a doctor performs.

Those values are required under federal law to be based on the time and intensity of the procedures. The values, in turn, determine what Medicare and most private insurers pay doctors.

But the AMA’s estimates of the time involved in many procedures are exaggerated, sometimes by as much as 100 percent, according to an analysis of doctors’ time, as well as interviews and reviews of medical journals.

If the time estimates are to be believed, some doctors would have to be averaging more than 24 hours a day to perform all of the procedures that they are reporting. This volume of work does not mean these doctors are doing anything wrong. They are just getting paid at the rates set by the government, under the guidance of the AMA...

Florida records show 78 doctors — gastroenterologists, ophthalmologists, orthopedic surgeons and others — who performed at least 24 hours worth of procedures on an average workday.

Some former Medicare chiefs say the problem arises from giving the AMA and specialty societies too much influence over physician pay...

More at the link.

Gloom and doom view of the European economy

Excerpts from a column in The Telegraph:

Europe’s debt-crisis strategy is near collapse. The long-awaited recovery has failed to take wing. Debt ratios across southern Europe are rising at an accelerating pace. Political consent for extreme austerity is breaking down in almost every EMU crisis state. And now the US Federal Reserve has inflicted a full-blown credit shock for good measure...

A leaked report from the European Commission confirms that Greece will miss its austerity targets yet again by a wide margin. It alleges that Greece lacks the “willingness and capacity” to collect taxes. In fact, Athens is missing targets because the economy is still in freefall and that is because of austerity overkill...

Standard & Poor’s did not say this outright when it downgraded [Italy] to near-junk BBB on Tuesday. But if you read between the lines, it is close to saying the game is up for Italy...

Spain’s crisis has a new twist. The ruling Partido Popular is caught in a slush-fund scandal of such gravity that it cannot plausibly brazen out the allegations any longer, let alone rally the nation behind another year of scorched-earth cuts. El Mundo says a “pre-revolutionary” mood is taking hold...

Like Greece before it, Portugal is chasing its tail in a downward spiral. Economic contraction of 3pc a year is eroding the tax base, causing Lisbon to miss deficit targets... The Portuguese press is already reporting that the European Commission is working secretly on a second bail-out, an admission that the wheels are coming off the original €78bn EU-IMF troika rescue. This is a political minefield. Any fresh rescue would require a vote in the German Bundestag, certain to demand ferocious conditions if this occurs before the elections...

All this is happening just as tapering talk by the Fed sends shockwaves through credit markets, pushing up borrowing costs by 70 basis points across Europe. Spanish 10-year yields are back to 4.8pc. These are higher than they look, since Spain is already in deflation once tax distortions are stripped out. Real interest rates are soaring...

The ECB needs to turn on the monetary spigot full blast – like the Bank of Japan – to head off a slide into deflation trap and enveloping disaster by next year. This is not going to happen. 

More at the link for those interested, or potentially affected by this.   A final reminder that the column represents the viewpoint of one financial columnist.  I wonder if all this will lead to a recovery of the price of gold as an alternative to currencies.

Testing a new way to fund a college education

I have thought for years that the most logical way for students to pay for college would be to have them commit to repaying a certain % of the future income.  Such a plan has now been proposed for the state of Oregon:

Oregon's legislature is moving ahead with a plan to enable students to attend state schools with no money down. In return, under one proposal, the students would agree to pay into a special fund 3% of their salaries annually for 24 years...

Oregon's plan has parallels to income-based repayment models used for decades in the U.K. and Australia, and more recently in the U.S., in which borrowers pay government lenders a share of their incomes to cover education loans...

In the 2010-11 school year, there were about 21,000 first-year students in public state colleges and universities in Oregon paying $171 million in tuition. To move them, and the next 23 classes behind them, into this program would cost the state more than $9 billion over 24 years until enough students had graduated and were paying into the system to cover its outlays...

The idea was first presented to Oregon legislators by students from Portland State University last year. Tracy Gibbs, one of the students, said that by freeing graduates from the steep overhang of debt many now face, the plan would allow young people to buy houses and contribute to their retirement accounts.

What the plan doesn't address, of course, is the inordinate cost of college.  That's a whole different problem.

"The scariest chart in the world right now"

The hyperbolic description comes from a Twitter feed, but the ominous implications of high youth unemployment in terms of social unrest are certainly real.

Via The Dish.

The plummeting cost of solar energy - updated

The total amount of energy we use every year – from coal, oil, natural gas, hydro, nuclear, and everything else – is dwarfed by the amount of solar energy hitting the planet each year. How dwarfed? The solar input is 5,000 times greater than the amount we use from all those sources, combined.

In fact, it would take only about 0.3% of the Earth’s land area to meet all of humanity’s energy needs through 2030 via solar power.

That's the most encouraging graph I've seen all year.  Via Boing Boing.

Addendum:  When I published the above post last month, one of the valid comments was that the scale of the graph was logarithmic.  Let's remedy that with this new graph -

- which I found today at The Economist, accompanied by these comments:

Rebranding is always a tricky exercise, but for one field of technology 2013 will be the year when its proponents need to bite the bullet and do it. That field is alternative energy. The word “alternative”, with its connotations of hand-wringing greenery and a need for taxpayer subsidy, has to go. And in 2013 it will. “Renewable” power will start to be seen as normal...

But it is in the field of solar energy, currently only a quarter of a percent of the planet’s electricity supply, but which grew 86% last year, that the biggest shift of attitude will be seen, for sunlight has the potential to disrupt the electricity market completely.

The underlying cause of this disruption is a phenomenon that solar’s supporters call Swanson’s law, in imitation of Moore’s law of transistor cost... Swanson’s law, named after Richard Swanson, the founder of SunPower, a big American solar-cell manufacturer, suggests that the cost of the photovoltaic cells needed to generate solar power falls by 20% with each doubling of global manufacturing capacity.

Moreover, technological developments that have been proved in the laboratory but have not yet moved into the factory mean Swanson’s law still has many years to run...

Reliability of supply is a crucial factor, for the sun does not always shine and the wind does not always blow.  But the problem of reliability is the subject of intensive research. Many organisations, both academic and commercial, are working on ways to store electricity when it is in surplus, so that it can be used when it is scarce. Progress is particularly likely during 2013 in the field of flow batteries. These devices, hybrids between traditional batteries and fuel cells, use liquid electrolytes, often made from cheap materials such as iron, to squirrel away huge amounts of energy in chemical form. “Grid-scale” storage of this or some other sort is the second way, after Swanson’s law, that the economics of renewable energy will be transformed.

More at the link.  Huge implications for world (and domestic) geopolitics within our lifetimes.

Federal deficit trend

I'll just leave this here.  Via.

The cost of maintaining former U.S. presidents

An infographic from The Telegraph, based on data from the Congressional Research Service.

The cost of funding the former presidents will raise eyebrows, given that the hefty speaking fees they can command after leaving office and the well endowed presidential centres and foundations that facilitate many of their post-presidential activities.

The figures don't include security provided by the Secret Service, costs which are on a separate, undisclosed budget. 

I suppose I'm crabby because I'm in the process of preparing my income tax paperwork, but I don't understand how George W. Bush can spend $85,000 on telephone bills. 

Income growth, 1966 to 2011

These numbers are adjusted for inflation.  Note the arrows at the top which show how far the vertical bars extend.

David Cay Johnston received the Pulitzer Prize for his coverage of tax policy while at The New York Times. He now teaches at Syracuse University College of Law...

In 2011 the average AGI of the vast majority fell to $30,437 per taxpayer, its lowest level since 1966 when measured in 2011 dollars. The vast majority averaged a mere $59 more in 2011 than in 1966. For the top 10 percent, by the same measures, average income rose by $116,071 to $254,864, an increase of 84 percent over 1966.

Plot those numbers on a chart, with one inch for $59, and the top 10 percent's line would extend more than 163 feet.

Now compare the vast majority's $59 with the top 1 percent, and that line extends for 884 feet. The top 1 percent of the top 1 percent, whose 2011 average income of $23.7 million was $18.4 million more per taxpayer than in 1966, would require a line nearly five miles long.

That disparity in income growth rates comes as the total federal tax burdens on those at the top have been slashed, compared with 1966, especially for the long-term capital gains that account for about a third of total income at the very top...

The Saez-Piketty analysis shows the concentration of growth at the very top increasing. That is bad for tax revenue and bad for social stability. The drop in incomes among the vast majority holds back economic growth, because there is just not enough aggregate demand to support creating enough new jobs to keep up with population growth...

That is a lot of stress being placed on people between the bottom rung and the top. I think it is more stress than the social ladder can bear, although when and how it will break no one will know until it happens...

Text and image from Taxanalysts, where there is more explanation.

The sequester effect on military spending

Excerpts from a New York Times article:

WASHINGTON — At a time when $46 billion in mandatory budget cuts are causing anxiety at the Pentagon, administration officials see one potential benefit: there may be an opening to argue for deep reductions in programs long in President Obama’s sights, and long resisted by Congress.

On the list are not only base closings but also an additional reduction in deployed nuclear weapons and stockpiles and a restructuring of the military medical insurance program that costs more than America spends on all of its diplomacy and foreign aid around the world. Also being considered is yet another scaling back in next-generation warplanes, starting with the F-35, the most expensive weapons program in United States history. 

None of those programs would go away. But inside the Pentagon, even some senior officers are saying that the reductions, if done smartly, could easily exceed those mandated by sequestration, as the cuts are called, and leave room for the areas where the administration believes more money will be required. These include building drones, developing offensive and defensive cyberweapons and focusing on Special Operations forces...

But today, deficit hawks outnumber defense hawks on Capitol Hill, and the possibility of $100 billion or more in additional annual cuts does not seem outrageous — if only agreement were possible on which programs should shrink fastest. 

Last week, a group of five former deputy defense secretaries — essentially the Pentagon’s chief operating officers — called for a “bottom up” review that reassesses the need for each major program and weapons system, saying this was an opportunity to accomplish cuts that have long been delayed, after a decade in which the American national security budget has nearly doubled. 

In their more candid moments — almost always when speaking with a guarantee of anonymity — the Pentagon’s top civilian and military leaders acknowledge that the painful sequestration process may ultimately prove beneficial if it forces the Defense Department and Congress to reconsider the cost of cold-war-era systems that are still in inventory despite the many changes made to the military in the last 10 years.

Via The Dish (whence the embedded image).

The myth of "peak oil"

[E]very time we think we’re starting to run out of it, new technologies arise that find us more. The widely circulated fears of a few years ago that we were approaching “peak oil” have turned out to be completely wrong. From the Arctic to Africa, nanoengineered materials, underwater robots, side-scanning 3-D sonar, specially engineered lubricants, and myriad other advances are opening up titanic new supplies of fossil fuels, many of them in unexpected places—Brazil, Australia, and, perhaps most significantly, North America. “Contrary to what most people believe,” declares a recent study from the Harvard Kennedy School, “oil supply capacity is growing worldwide at such an unprecedented level that it might outpace consumption.”..

Countries that have never had an energy industry worth mentioning are on the brink of becoming major players, while established fossil fuel powerhouses are facing challenges to their dominance. We are witnessing a shift that heralds major new opportunities—and dangers—for individual nations, international politics and economics, and the planet...

We human beings have consumed, over our entire history, about a trillion barrels of oil. The U.S. Geological Survey estimates there is still seven to eight times that much left in the ground. The oil that’s left is just more difficult, and therefore more expensive, to get to...

But prices have risen dramatically in the last decade. They have been averaging well above $80 a barrel for the last couple of years. That’s partly due to ever-increasing demand from developing nations and partly due to political factors (such as fears that Iran’s nuclear ambitions could cause serious turmoil in the Persian Gulf). But the price rise is also partly due to another kind of technology: computer algorithms that enable quantitative hedge funds to place thousands of ultrafast buy and sell orders, a practice known as high-frequency trading, which came into widespread use with oil futures in the middle of the last decade. No less an authority than Rex Tillerson, head of ExxonMobil, told Congress in 2011 that such speculation is a key reason why the price of a barrel of oil has stayed so high...

Fracking is about as popular with the general public as puppy kicking, but it’s very big business. It’s producing so much natural gas from shale fields in Texas, Ohio, Pennsylvania, and elsewhere that the commodity’s price has cratered, dropping from over $10 per thousand cubic feet five years ago to about $3.25 today. Fracking can also produce oil, which is the main target in North Dakota. As many as 200 new wells are being drilled every month in the state to exploit the Bakken formation, a 25,000-square-mile subterranean swath extending into Montana and Canada that may contain hundreds of billions of barrels...

And the fracking boom is only just beginning. There are believed to be oceans of yet-untapped shale gas and oil in Argentina, China, and several countries in Europe... What’s more, the earth holds other fossil fuels we haven’t even begun to tap. Governments and corporations are researching a number of long-shot energy sources, from a not-fully cooked type of oil called kerogen to methane hydrates in the ice of Alaska. 

Extended excerpts from Pacific Standard, via The Dish.

"Wealth inequality in America"

 

YouTube link.

If you're in the 1%, don't watch this animated short

YouTube link.

Created by Ed Asner.

Musing about American foreign policy

Extended excerpts from a thoughtful essay:

The debate about taxes is over, which is one of the few good things that can be said for it. The debate about spending, which has already proved narrow and grubby, is pending...

Around the world, “power projection” is, in fact, a central mission of American forces. Smith expressed alarm at the prospect of its diminishment. He asked a question, which was purely rhetorical: “What if, all of a sudden, we don’t have troops in Europe, we don’t have troops in Asia, we are just, frankly, like pretty much every other country in the world?”..

Early Americans considered a standing army—a permanent army kept even in times of peace—to be a form of tyranny. “What a deformed monster is a standing army in a free nation,” Josiah Quincy, of Boston, wrote in 1774. Instead, they favored militias...

Not until the Second World War did the United States establish what would become a standing army. And even that didn’t happen without dissent. In May of 1941, Robert Taft, a Republican senator from Ohio, warned that America’s entry into the Second World War would mean, ultimately, that the United States “will have to maintain a police force perpetually in Germany and throughout Europe."..

On September 8, 2011, when Buck McKeon convened the first of his House Armed Services Committee hearings on the future of the military, no one much disputed the idea that the manifest destiny of the United States is to patrol the world...

In the speech, Eisenhower reckoned the price of arms:

Every gun that is made, every warship launched, every rocket fired signifies in the final sense a theft from those who hunger and are not fed, those who are cold and not clothed. This is a world in arms. This world in arms is not spending money alone; it is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. . . . This is not a way of life at all in any true sense. Under the clouds of threatening war, it is humanity hanging from a cross of iron.

The United States, separated from much of the world by two oceans and bordered by allies, is, by dint of geography, among the best-protected countries on earth. Nevertheless, six decades after V-J Day nearly three hundred thousand American troops are stationed overseas, including fifty-five thousand in Germany, thirty-five thousand in Japan, and ten thousand in Italy. Much of the money that the federal government spends on “defense” involves neither securing the nation’s borders nor protecting its citizens. Instead, the U.S. military enforces American foreign policy...

Lately, Bacevich argues, Americans “have fallen prey to militarism, manifesting itself in a romanticized view of soldiers, a tendency to see military power as the truest measure of national greatness, and outsized expectations regarding the efficacy of force. To a degree without precedent in U.S. history, Americans have come to define the nation’s strength and well-being in terms of military preparedness, military action, and the fostering of (or nostalgia for) military ideals.”..

Only a tiny minority of members of Congress have known combat, or have family members who have. “God help this country when someone sits in this chair who doesn’t know the military as well as I do,” Eisenhower once said. From Reagan to Obama, but especially during the Administrations of the past three Presidents, none of whom ever saw active duty, civilian thinking about foreign policy has been subordinated to military thinking...

The decision at hand concerns limits, not some kind of national, existential apocalypse. Force requires bounds. Between militarism and pacifism lie diplomacy, accountability, and restraint. 

There's more in the five-page-long essay in The New Yorker.  Those who are regular readers of this blog have probably figured out that when I raise objections to war, it is typically not on a moral basis.  I have no ethical dilemna with the necessity of war, given appropriate provocation and necessity.  What I object to is the economics of war.  I don't believe that we can afford our current military posture.  I simply do not understand why we have 55,000 troops stationed in Germany. 

Who will suffer from the new tax increases?

First, look at the data in the cartoon above, published several weeks ago in the Wall Street Journal.  The numbers can be assumed to be correct.  Think about and decide where your sympathies lie.  The Wall Street Journal article notes that "the new law's effects will be highly individualized—and in some cases highly painful."

Then (if you want) you can read a rant about the WSJ article at Hullabaloo:

The Onion couldn't top this. Whether it's the sad faces of all these put-upon dejected rich people, or the elderly minority couple who is depressed despite not paying extra taxes (or was that the point?), or the distressed single Asian lady making $230,000 who might not be able to buy that extra designer pantsuit this year, or the "single mother" making $260,000 whose kids presumably have a deadbeat, indigent dad just like any other poor family, or that struggling family of six making $650,000 including $180,000 of pure passive income and wondering how to make ends meet, mockery is almost superfluous...

Beyond mockery, though, that the Wall Street Journal would even dare publish such a thing without irony is indicative of the reality that the wealthy don't live in the same country as the rest of us... They're people who see a single individual making $230,000 as struggling to get by, and severely put upon by the loss of a couple thousand dollars to help pay for decrepit infrastructure and basic healthcare for the indigent.

More at the links.

Land acquisition by the Founding Fathers

Two excerpts from Stephen E. Ambrose's Undaunted Courage: Meriwether Lewis, Thomas Jefferson, and the Opening of the American West:

Before the revolution, George Washington owned tens of thousands of acres in the Tidewater and Piedmont and over sixty~three thousand acres of trans-Appalachia. He wanted more.

Jefferson inherited more than five thousand acres in the Piedmont from his father. He wanted more. From his wife he got another eleven thousand acres. And though he was a substantial land-owner, he was not a great one by Virginia standards...

Jefferson’s interest in exploring the country between the Mississippi River and the Pacific Ocean ran back a full half-century. His father had been a member of the Loyal Land Company, which had been awarded by the crown some eight hundred thousand acres west of the Appalachian Mountains. (p. 68)

This brings to mind some comments by Thomas Paine in Agrarian Justice:

Land, as before said, is the free gift of the Creator in common to the human race. Personal property is the effect of society; and it is as impossible for an individual to acquire personal property without the aid of society, as it is for him to make land originally.
Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. So inseparably are the means connected with the end, in all cases, that where the former do not exist the latter cannot be obtained. All accumulation, therefore, of personal property, beyond what a man's own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came.

Gold - in one gram portions

For the dedicated survivalist ("prepper"), there are now forms of gold available that are designed for "retail" use.  If you need to leave your shelter to buy ammunition, you probably don't want to be carrying with you bars of bullion (or even one-ounce coins at - currently - $1,600 each).

The Combibars shown above are precisely scored (in the fashion of Kit-Kat bars) to allow one-gram wafers to be snapped off.  At current prices a gram would be about $50 (but there's no telling what they might be worth in a dystopian world).  They are also available in silver. 

Their current popularity is fueled not so much by fears of an apocalypse as by fears of economic instability and currency collapse, as described by Reuters:

Elsewhere, demand is particularly strong among Germans, still scarred by post-World War One hyperinflation, when money became all but worthless and it took a wheelbarrow full of notes to buy a loaf of bread.

"Above all, it's people aged between 40 and 70 that are investing in gold bars and coins," said Mesaric. "They've heard tales from their parents about wars and crises devaluing money."

Nonetheless, as developments in the euro zone lurch from one crisis to another, demand for gold that can be sold in vending machines is also growing. Since the launch of the machines, which operate under the name "GOLD to go", 50,000 customers have withdrawn more than 21 million euros in gold. The average buyer is male, over 50 years old and well off.

Economic life in colonial America

An extended excerpt from Stephen E. Ambrose's Undaunted Courage: Meriwether Lewis, Thomas Jefferson, and the Opening of the American West:

“Such constant expansion was critical, because the Virginia plantation of the day was incredibly wasteful. The low ground or inferior bottomland was planted to corn, to provide food for slaves and animals. Fertile land identified by hardwood growth was saved for tobacco. The planters had their slaves gird large trees and leave the trees to die while plowing lightly around them. Slaves created hills for tobacco with a hoe, without bothering to remove the trees. After three annual crops of tobacco, these "fields" grew wheat for a year or so before being abandoned and allowed to revert to pine forest. The planters let their stock roam wild, made no use of animal manure, and practiced onLy the most rudimentary crop rotation. Meanwhile, the planters moved their slaves to virgin lands and repeated the process. The system allowed the planters to use to the maximum the two things in which they were really rich, land and slaves. Tobacco, their only cash crop, was dependent on an all-but- unlimited quantity of each...

Tobacco wore out land so fast there could never be enough, but tobacco never broughr in enough money to allow planters to get ahead. Their speculation in land was done on credit and promises and warrants, not cash, so they were always land rich and cash-poor. Small wonder Jefferson was obsessed with securing an empire for the United States.

Tobacco culture represented an all-out assault on the environment for the sake of a crop that did no good and much harm to people's health as well as to the land, not to mention the political and moral effects of relying on slavery for a labor force. But to Virginia's planters, even to so inventive a man as Jefferson, there appeared to be no alterative. In fact, an alternative existed right under their noses.

German immigrants, farming in the Shenandoah Valley, had a much different relationship with the land from that of the planters of English stock. The Germans had not received huge grants of land from the English king or the royal governor; they had bought their land, in relatively small holdings. Coming from a country with a tradition of keeping the farm in the same family for generations, even centuries, they were in it for the long haul, not for quick profit. They cleared their fields of all trees and stumps, plowed deep to arrest erosion, housed their cattle in great barns, used manure as fertilizer, and practiced a precise scheme of crop rotation. They worked with their own hands, and their help came trom their sons and relatives. No overseer, indentured servant, or slave -- men with little interest in the precious undertaking of making a family farm -- was allowed near their fields.” (pp. 32-33)