There are much more serious issues at stake in the ongoing unpleasantness in the Middle East. But for the sake of completeness, it is worth taking a moment to look at the performance of cryptocurrency in a modern war situation. A snippet from a report by an Iranian:
“Several of the country’s top banks have been taken offline as a result of the cyberattacks, as well as Iran’s top cryptocurrency exchange, Nobitex, which said its “hot wallet” had been compromised but promised it would return any lost money.”
Much as I am intrigued by, and have the highest hopes for, crypto, it has a major vulnerability. Actually, two related species of vulnerability: cyberattacks and dependence on connectivity & electricity.
Conventional banking shares some of this but cash money still exists and can be used to tide one over during a brief power interruption. There will always be a place for cash in my heart and my wallet, even though it is debased fiat money.
Some years ago, I was driving across the miles & empty miles of West Texas on a weekend. Stopped in a tiny town to fill up with gas – but the internet was down. This meant the gas station could not process a credit card, and the bank’s ATM was out of service. Nothing to do but wait … and wait … until internet service was restored.
Yes, adequate cash is an important part of any preparations for a long trip.
Some of us got some bags of ‘junk silver’ - 90% silver coins made before the new-and-improved base metal sandwiches of today. Interestingly, a 25cent piece of that is worth the price of about a gallon of gas today. Being either way ahead or way behind, that time I was way ahead and bought it when silver was about $4/oz. One of my few good moves.
Yeah, it’s hard to predict how it’ll all pan out. However, I can’t help but think that if any medium of exchange survives after the great collapse, it would likely be precious metals, not worthless paper IOUs backed by the “full faith and credit” (snort) of a defunct government.
According to Adam Ferguson’s book “When Money Dies”, what really talks after a great collapse (such as those experienced by Austria & Germany after WWI) is tradable goods (barter). One old lady survived very nicely trading her late husband’s collection of fine cigars for chickens, etc.
I take your point but wonder if, at whatever their debased value, dollar notes could still be useful as a medium of exchange. After all, we’ve all seen the pictures of wheelbarrows full of Reichsmarks. They were still preferable to barter in cases where the counterparties didn’t have something the other wanted.
Silver and gold have been performing well since Biden seized Russia’s assets starting in 2022.
US stole Russia’s money in 2022, and now everybody knows not to keep their money with the yanks, and the main way they’re getting out is gold or silver or bitcoin.
The Monday opening discontinuity in silver/btc doesn’t seem to have bled over to the silver/gold ratio – so unless there is a new industrial application for gold as well as silver, this seems to be “business as usual” rather than part of silver’s recent decoupling from gold.
