Will there be money after the end of the world?
Whatever your personal fantasy of the end of civilization entails (natural disasters, pandemics, meteor strikes, nuclear war, or some other black swan theory), if humanity survives catastrophe with the memory of modern civilization, new currencies will most likely be established in the post-apocalyptic society.
Economists, doomsday preppers, crypto-anarchists, and others are already making their predictions, from gold and silver, to bartered goods, to bitcoins and bottle caps. Let's take a look at the future of cash.
Old money, new money
Along the lines of the cartoon fan theory that The Flintstones wasn't set in the Stone Age, but in the same world as the Jetsons after nuclear war, some are predicting that the post-apocalyptic world won't look much different from the premodern one.
In Belgian economist Henri Pirenne's Economic and social history of medieval Europe, he references the German economic concept of "Naturalwirtschaft," or "Natural economy," which references an economic structure similar to that of Europe in the Middle Ages, in which "the part played by money was then so small as to be almost negligible." This isn't to say that currency didn't exist, but so few people had it in meaningful enough amounts that it wasn't used as much as bartering or reciprocal trade systems.
The return to a natural economy of bartering in the post-apocalyptic future is one possibility that survivalists (also known as preppers, the folks who are stocking bunkers with canned goods and weapons right at this moment to prepare for when the Shit Hits The Fan (or SHTF), which stands for whatever their personal vision of societal collapse is) are looking forward to.
Throughout the prepper blogosphere, shopping lists abound of the types of things that will be more than worth their weight in gold (more on gold itself, later). As The Prepper Dome points out on their list "Six Kinds of Currency That Might Emerge After The Collapse,": you can’t eat gold. The list of six includes:
- Salt: citing its use to pay Roman soldiers and its multiple medical and culinary uses
- Fur: because in many countries squirrel pelts were essentially traded like dollar bills
- Tobacco: it’s portable, addictive, and the modern use of cigarettes for bartering purposes is obvious
- Knives: are portable, durable, useful, and were traded as currency in ancient China
- Alcohol: can be used for fuel, preserving food, cleaning wounds, as well as being divisible and durable
- Herbs and spices: particularly marijuana, since it can be eaten and used for medicine as well as grown for hemp fibers can be used to make rope, clothing paper, and fuel
Prepper Zine has a list of 25 barterables, including many daily hygiene items like soap and toothbrushes, as well as condoms, which are actually a survivalist staple: not only because bunker babies would definitely complicate your post-apocalypse plans, but because they have tons of non sexual uses. Other health-related items are also a great idea to stockpile, like painkillers, antibiotics, and bandages, since no matter how the infrastructure fails, it's likely that pandemics will follow.
Silver, gold, and crypto
While the super-rich are buying land in New Zealand to ride out the apocalypse, the rest of us have to figure out whether we'll be able to get money out of banks or if we should start burying tin cans full of gold coins in our backyards.
The blog Off Grid Survival argues that cash will still be king following a crisis situation like a natural disaster, where they imagine credit and debit cards won't work, but you would still be able to throw small bills at a convenience store counter while filling your car with gas and grabbing some emergency jerky during a mass evacuation.
There are a few arguments against predicting a cash for gold economy in a world W.R.O.L. (another prepper acronym, meaning Without Rule Of Law). Forbes' "How To Doomsday Prep Like An Economist" advises that gold will be practically useless because of income effects: "A disaster bad enough to make developed nation currencies completely worthless is also going to absolutely obliterate the demand for gold because gold is a luxury and incomes will plummet." Others make the argument that while gold has more intrinsic value, silver is a better long-term investment.
According to an attendee of this year's Silver & Gold Summit in San Francisco, cryptocurrency advocates were out in full force promoting the idea that bitcoin could be the new gold. "Buy bitcoin" has recently surpassed "buy gold" in Google search results rankings, so it's clearly not only the experts who are thinking all that glitters is not.
There is still a perception amongst economists that bitcoin is for bad actors and is too unstable to be considered a serious investment. Jim Rickards, author of Currency Wars: The Making of the Next Global Crisis, was quoted in an interview for Business Insider about gold versus bitcoin characterizing it as "a utility token for criminals, terrorists, money launderers, tax evaders." He believes the price is being manipulated, that the amount of energy required to mine cryptocurrency will soon hit a wall, and that the subjective value has yet to be tested against a recession or financial panic (much less doomsday).
Goldman Sachs also says bitcoin is not the new gold, but even though Jamie Dimon, the chief executive of JP Morgan, said he would fire anyone who traded bitcoins, JP Morgan analysts have expressed the opinion that it could be.
For survivalists who believe they could still access or create enough electricity to power their own internet, bitcoin has the same appeal as gold in that it's self-banking and a finite quantity of it will exist, protecting against inflation and deflation. That is, unless quantum computing to create more advanced cryptocurrencies or asteroid mining to get more gold are features of the future.
Most bitcoin vs. gold investment comparisons (more reading from Coindesk and APMEX, who represent both sides) end up saying a diverse portfolio is best, and that there's no reason not to go for both as long as you aren't investing more than you can afford to lose. All of the above considered, do not rely on MONTAG Magazine for investment advice, because the last currency we're going to explore is totally fictional and made out of trash.
In the 1950s-inspired post-nuclear world of the Fallout video games, you emerge from an underground bunker in the 22nd or 23rd century, and the currency of the land is bottle caps. Not just any bottle caps: Nuka-Cola bottle caps with 21 crimps and ridges.
According to the fans who run the Fallout Wikia and Gamepedia entry for Fallout, bottling manufacturers were lost in the Great War, a nuclear war that took place in the year 2077, and adoption of the caps happened between 2093 and 2103 in the city called the Hub. Because the facilities to produce them were lost, bottle caps made an ideal currency because they had a fixed supply, were difficult to counterfeit (though counterfeit coins do exist in the game), and were originally backed by bottles of water, an extremely valuable resource in the irradiated deserts.
When the preorder for Fallout 4 was announced, one industrious fellow who had been collecting bottle caps for over 7 years sent Bethesda Game Studios 2,240 bottle caps, 11.2 pounds of them, and while they did allow him to pay for a preorder in the game's currency, they also made it clear that they did not wish for the stunt to be repeated.
Analysis of this transaction by The Game Theorists, a YouTube channel that actually does the math on silly questions like how much fictional future video game currencies would be worth in real money, found the actual worth of 2,240 bottle caps by two different methods.
They first used calculations from the 2010 game Fallout: New Vegas, in which gold bars are sold for 10,539 caps each, and the price of gold per ounce in 1961 (based on the songs playing on the radio in the game's soundtrack), puts the price at $1.67 per bottle cap, which due to inflation would be $52 per cap today. So paying 2,240 bottle caps for a $60 video game preorder was overpaying by about $116,420.00.
However, using a second calculation, with the real world worth of bottle caps according to the value of carbon steel, it would take 57,142 caps to equal $1, so a $60 preorder should have cost 3,428,571 caps (he paid less than a tenth). The obvious calculation of how much he actually paid for the game brings the cap to dollar value at approximately 33 and 1/3 caps to $1.
So it may be impossible to predict, if our post-apocalyptic society chooses an arbitrary item like bottle caps as currency, what we should start hoarding now. It could be Starbucks plastic coffee stirrers, Keurig coffee capsules, or Bic pens. When the SHTF, the currency of the land could be bitcoin, gold, or bartered goods, but we won't know until after it happens. Maybe money won't matter at all, and all the economists, preppers, and bitcoin hoarders will be wrong. Maybe the most valuable thing we will have is each other.