Bitcoin and Gold Won’t Save You

With the rise of AI, the growing U.S. debt, and the looming possibility of WWIII, there’s been some discussion about how to invest in case society collapses. Though these conversations tend to be overly dramatic, most of the theories around how to allocate your money for the end of the world are misguided. As I tweeted a few weeks ago:

One of the worst arguments I’ve seen is that you should own gold or Bitcoin in case of societal collapse. I can promise you that both will be worthless in this scenario. Internet money and a shiny rock only have value in a functioning civilization, not the apocalypse.

If the world (as we know it) comes to an end, many of the things that we rely on today, such as the internet, may be unavailable. In such a scenario, what we value would change dramatically. Things that were traditional stores of value in a civilized society (i.e. Bitcoin, gold, stocks, etc.) would have almost no use in an uncivilized one. And things that we once took for granted would have immense value overnight.

But what are the those things? And should you invest in them to hedge against a societal collapse? Let’s take a look.

What is Always Valuable to Humans?

If the apocalypse ever comes, the things that will remain valuable to humans are those that satisfy our most basic needs. On Maslow’s hierarchy of needs these would be related to our physiology and our safety. These include:

  • Food/Water: Highest on the list of needs are those that keep us immediately alive. This is where canned goods, emergency water, and farmland would be extremely valuable in an end-of-the-world like scenario. While having a farm would be an expensive way to hedge the apocalypse, there’s no excuse when it comes to having emergency food and water.
    • The ideal emergency foodstuffs are those with the longest shelf life. These include: honey, canned goods, dried beans, white rice, and sugar, among other things. Make sure to store your food in air tight containers in a cool, dry place for the best results. In addition, if you have access to electricity, you can store even more food in a freezer or refrigerator.
    • When it comes to water, in addition to having emergency water, you may also want to consider getting a LifeStraw. This is a piece of survival equipment that will allow you to drink un-purified natural sources of water without having to boil it first. While not a perfect long-term solution, it could come in handy when you are on the go. 
  • Shelter: Once you have enough food to survive, you will also need to ensure that you have a place to stay. This could be your primary home or a safe house, if there is an armed conflict in the area. This might seem extreme, but during WWII some French citizens were able to escape to their safe houses in the countryside as the cities were taken over. While there is no perfect shelter, having a place to protect you from the elements and other threats is paramount to your survival.
  • Medicine: In a world where healthcare systems are nonexistent, access to medicine can mean the difference between life and death. Without functioning hospitals and pharmacies, even minor injuries and illnesses can become life-threatening. As a result, you should stock up on a variety of different medicines to stay alive.
    • Some of these medicines include: prescriptions (if necessary), over-the-counter medications (e.g. ibuprofen, painkillers, etc.), first aid and hygiene supplies, and dental equipment (e.g. toothbrush, toothpaste, etc.). Ensuring that you can assist with common forms of pain while also preventing infection will be crucial in a survival scenario.
    • In addition to having medicine, it’s equally important to be able to assist yourself and others when necessary. Consider taking first-aid/CPR classes and having reference textbooks on how to administer medical care in an emergency. 
  • Survival Gear/Weapons: In addition to the essentials like food, water, and medicine, having the right gear and weaponry can greatly enhance your chances of survival in a post-apocalyptic world.
    • Some of the most necessary survival gear would include: fire-starting equipment, portable lighting, communication devices, and other tools. Having the ability to be portable, make food, and setup shelter (if necessary) will provide you with more flexibility in case you can’t stay in one location indefinitely.
    • If you’re in a world where law and order no longer apply, having weapons for your own defense will be paramount. You should consider buying pepper spray, a taser, knife, and even firearms (if legal in your area) to defend yourself. While this won’t guarantee your survival, it’s better to have these weapons and not need them, then need them and not have them. 
  • Community: Following a societal collapse, you may need more than just a list of items to survive. This is where a community of people you can trust will make all the difference. Not only will a strong community allow you to share resources, knowledge, and protection, but it can also provide emotional support in the post-apocalyptic era. They say that there’s strength in numbers and nowhere is this more true than when civilization ceases to function normally.

While the probability of a global societal collapse is incredibly low, preparing for such an event can have its advantages even if the apocalypse never comes.

For example, early on in my time in NYC I bought a chemical spill kit in case a biological weapon was ever used on the city. I remember telling my colleague Michael Batnick about this and he thought it was ridiculous. He even tweeted about it.

Well, a little over a year later COVID-19 swept through NYC and people were getting infected left and right. While the CDC wasn’t yet recommending mask usage, I wanted to find one, but couldn’t. Then I remembered—my chemical spill kit!

After digging through my closet I found the kit and opened it. Lo and behold, inside was an N95 mask. My low-grade paranoia had saved me. Did that N95 mask make a difference? I have no idea. But I never caught COVID in that first year and I was masked up far sooner than many others.

This is just one example of how preparing for the worst can provide you with future benefits that you can’t even imagine. So even if we don’t experience the end of the world, having emergency supplies and a strong community could benefit you in other ways. You don’t have to spend a lot of money on this either. I spent $200 and that was enough to provide me with peace of mind in case things got very bad.

Of course, things are unlikely to get very bad everywhere at once. However, they can get bad in one place very easily. It’s in this scenario where things like Bitcoin and gold still have value.

Where Bitcoin & Gold Still Have Value

So far we’ve assumed that Bitcoin and gold would be worthless in a global civilization-ending event. I hope you can see why this would be the case. However, what about during a smaller, localized collapse? Say an individual country experiences a coup or their currency is devalued due to hyperinflation. Would Bitcoin and gold be valuable there? Absolutely. 

In the event of a localized collapse, anything that is still considered a store of value by the rest of civilization will remain valuable. As long as you can transport this wealth to another (more stable) location, it will have value. So as much as I want to dunk on people that buy assets to hedge the apocalypse, they have a point if the “apocalypse” is much smaller in scope. 

Fortunately, most of the people that own such assets will never experience any such event. They live in relatively stable countries yet invest in Bitcoin and gold as if the global financial system is on the verge of collapse. While there are many reasons to own these assets, total collapse of the financial system is one of the least convincing. If such an event ever occurs, we will have much bigger problems on our hands than our portfolios.

Thank you for reading.

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This is post 398. Any code I have related to this post can be found here with the same numbering:

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