"If It’s Not A Hard Asset, It’s No Asset"

There are many people that give you a list of things you should have if something bad suddenly happens. There is nothing wrong with that but many people never give much thought as to why those things are valuable during or after a crisis.

How many times has someone told you to hold physical stock certificates or treasuries in case the banks are shut down or keep your credit card paid up just in case you need to make emergency purchases? I’m guessing not very often. Why is that? In normal times it might be a smart thing to do but in a serious crisis that has the capacity to change society, those things become worthless.

Everyone has read the many stories about what would happen if the power grid were to go down. Basically everything that depends on electricity would stop working and become useless. Well, if the banking system were to shut down because of economic collapse, cyber attack or a grid down scenario, everything connected to the banking system would stop working as well.

If you were holding a credit card, what good would it do when it is issued by a bank and depends on credit created by the bank to work? No bank, no credit, no working card. Having a physical stock certificate in hand might seem smart but once the banking system is shut down, what will you do with that piece of paper? Even if you could find someone to buy it, how will you get paid? If the monetary system has collapsed, what medium will you take payment in? Even if you find a person to buy it, and they give you cash, is that medium of exchange going to be worth anything?

That certificate shows you have ownership in a company but with the monetary system shut down, how much will that company be worth as time goes on? If you have money in retirement accounts, savings accounts or checking accounts and the banks shut down, all you have to prove you have money is a monthly statement. You have nothing. Paper assets only have potential value if normalcy returns to the system following a crisis.

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