That also makes them good speculative assets fwiw
Investing in gold as a hedge for the collapse of society is imo a really piss-poor idea. Either invest in stuff you can use (i.e. food) or stuff that will be demand (Ham radios, firearms). Gold is just not going to be the future medium of currency there isn't enough of it in practical sized values.
[1]: https://en.wikipedia.org/wiki/History_of_money#Overview
Ham radio is only useful if you can power it and find someone else with one who can also power it, my guess not enough people will have them to be useful. firearms are only useful if you have ammo - while you can make bullets and black power it is hard to say if it is worth it. I doubt there will be much firearm trade unless there is an ammo manufacturing (no longer society collapse - though a much more likely scenereo) - people who have ammo will keep the guns that go with it.
I'm not disagreeing that there are plenty of things other than gold to hold onto. However gold is still a reasonable choice for post disaster trade for the same reasons society settled on it in the first place. (note that society also used copper and silver for trade)
Roman currency (both the coinage and the numeric value promixal to goods) lasted for years after the empire fell. It was just easier to use that relative value, and rely on local credit
> "society will have broken down far enough that even the gold will be relatively worthless and the predominant goods of choice will be cans of dog food and beans.
it absolutely was peaceful, especially in those two countries.
Again, yes, it was peaceful BETWEEN the US ans UK, but your thesis that the primary global currency can collapse peacefully without a catastrophic global crisis is... well, picking the transition of the Pound to make that point is not a choice I would have gone with.
Now that same kind of dinner can still be had for the same silver dollar, but the amount of gold in the small 1923 gold eagle[0] would be enough to serve 30 today, not merely the 10 diners of 100 years ago.
And some of these are nice restaurants.
Today if your dollar does not contain the full ounce of silver it was originally intended to, and all you have is a $1 bank note instead, it still buys a kid-sized ice cream cone at McDonald's. Now sometimes only during special promotions depending on market.
[0] Regular ordinary legal tender, but were all confiscated by the government because they were gold in 1933, when the ownership of gold by Americans was outlawed until decades later (only after its backing of the dollar was discontinued).
This has been (more or less) the standard since like forever, for at least several thousand of years including in major world's empires including the Greek, Persian, Roman (Rome and Byzantine), Islamic (Rashidun, Umayyad, Abbasid, Ottoman) and British Empire until 19th century where bimetallic currency namely silver coin (dirham) and gold coin (dinar) were pervasive.
Fun facts, the word dirham in Islamic empire is derived from the word drachma with the same meaning in Greek, while dinar is derived from the Roman word denarius.
When you try to do both, you end up with situations where the government gets incentivized to take a metal that's fairly low value, and stamp a design into it to infuse it with new value. Silver bullion in the 1880s that might be worth 60 cents an ounce suddenly went up to a buck and change when you turned it into a Morgan or Trade Dollar. I suspect the introduction of the $20 gold piece in 1849 (and possibly the $3 in 1854) were in part to sop up a glut on the gold market.
We hyperinflate the currency by printing $trillllions a year and hading it out to countries at war, businesses that have failed and defending the oceans.
USD has already been hyperinflated, its just the affects are being felt slowly as the money "trickles down" from the 1% to the rest of us.
It's why collectables, real estate and such were the first assets to inflate, because that's what the rich buy, food inflation is much slower.
Hyperinflation is coming, I've been saying it and buying gold since QE1 back in '08.
It probably won’t come to that but we don’t know. And uncertainty is bad for business.
unless we agree for it not to. it took faith in a social structure to put the system together, and as long as it's maintained, it will stay together.
there's likely no invisible hand that builds and then ruins all of our achievements (unless we want to believe there is one (which makes it just us again in the end))
I'm not sure what makes you feel that way. Gold and Bitcoin are up against the dollar in the past decade, and by a significant margin. Bitcoin is up ~225x against the dollar. Gold is up ~50x against the dollar going back five decades. The US dollar is pretty terrible at holding value.
You could also find individual stocks or maybe even the S&P500 and compare those to the dollar as well (and to each other).
Gold you can't travel with (weight and loss due to theft and also probably actually illegal) and is also not accessible, and Bitcoin you can't buy a coffee with. Other available crypto currencies just do worse jobs than Bitcoin or dollars at their respective functions.
The key here is to understand that monetary instruments have pros/cons. Dollars have the con that they aren't a great store of value (and this is by design). Dollars have the pro that they are widely accepted, hold their value in the short term (i.e. not volatile), and are highly liquid. Bitcoin has the pro that it's a great store of value, but has cons like inability to transact. Stocks are liquid but volatile, etc.
Seriously look at the last 10 year chart of Bitcoin vs USD (or if you want purchasing power) - its far, far too volatile to be a store of value.
That's not the case for most people in most countries. There are billions of people who are not even able to open a bank account, let alone a US stock brokerage account. Bitcoin and gold are way more accessible to the average person.
I agree that every instrument has a different set of tradeoffs though.
Your bank knows you, perhaps for many years. Then you move country, or lose your phone, and suddenly they have forgotten you, and you face an uphill nightmare to retain your old accounts.
A share certificate should be a bearer asset, but it is not accepted anywhere outside the original jurisdiction (e.g. EEA for UK/European shares).
Which country? Last week I travelled on planes in USA and may have carried 35 pounds of silver coin, about a pound of gold coin, and >$10k cash. No problems other than being careful putting bag in overhead bin.
Travelling in/out of countries like Turkey with metal in carry-on has always been easy. One time the screener was curious and wanted to see some coin, but no problem.
Diversified bearer instruments are a prudent way to proceed into the coming government chaos in next ten years.
> Well you can sell the stock and convert it into dollars
How well did that work the entire week after 9/11?
Shipping valuables as insured cargo is another option.
That happens with account balances in USA. Try to fight an account seizure after the fact in courts in USA, and be prepared to lose.
Tangible items including metal are diversification, and bitcoin and ethereum are incredible across borders.
Assets are assets.
Claiming that an asset is better than a currency because it’s better at what assets are supposed to do and currencies are explicitly not supposed to do is strange to say the least.
Currency is exceptionally liquid (interchangeable) and nearly-universally accepted within a particular region.
Stocks, bonds, and other financialised instruments tend to be better inflation hedges, as currency will, does, and should inflate and deflate to meet actual transaction needs, and to dilute excessively burdensome debts.
Real estate is exceptionally durable, tends to hold value well (excepting speculative bubbles), and serves excellently as collateral for debt. Other long-term tangible property (e.g., industrial plant and equipment) can play a similar role.
Commodities tend to be intermediate between cash and other forms of financialised instruments, generally having inherent liquidity (that is, the commodity can be sold for use-value), as well as its investment role.
Collectables ranging from fine arts to wines to luxury automobiles tend to have hold value well (again, modulo speculative bubbles), and are both more readily stored and transported than real estate.
Cryptocurrencies tend to most strongly resemble the latter, in both their intrinsic durability (which is NOT the same as price stability), and their portability, which is to say that they serve as a highly effective way of moving financial wealth between jurisdictions, often without any external visibility, though of course blockchain transactions, like diamonds, are forever.
Power and ATMs were out for two weeks on Puerto Rico, which is basically run by the USA. Maybe keep a couple weeks of cash under the mattress.
https://www.cnn.com/2022/10/01/us/hurricane-fiona-puerto-ric...
That's correct. Almost everything beats the US dollar (except other fiat currencies).
I just mentioned one: gold. It's a bit early to tell for Bitcoin, of course it's probably not going to be doing 225x every decade, but I could see it holding its value better than the US dollar does.
Bitcoin we can come back to in another 150 years or so.
Interesting, I didn't know that. On the other hand, it's hard to imagine what other asset would have successfully preserved its value all the way back to the Middle Ages. Certainly not company shares. Real estate maybe? Although that would require maintaining ownership through numerous wars, revolutions and tax regimes.
Same with gold, buy low and sell high.
But don’t worry, there’s an entire scam industry (the other thing you mention) built almost entirely on people not understanding the difference between an asset and a currency and the almost diametrically opposite roles and purposes of the two.
Not because US bills are used in SE Asia or other places but because big transactions (like oil) are done in USD.