“The cost of living has gone up another dollar a quart.”

— W. C. Fields

“A dollar saved is a quarter earned.”

— John Ciardi

“The value of a dollar is social, as it is created by society.”

— Ralph Waldo Emerson

“The dollar used to be a gold standard currency. And the dollar is really good in the last century, I mean in the 19th century.”

— John Forbes Nash, Jr.

“A U.S. dollar is an IOU from the Federal Reserve Bank. It’s a promissory note that doesn’t actually promise anything. It’s not backed by gold or silver.”

— P. J. O’Rourke

“At some point, the dollar has to give. You can’t just keep printing money, and monetizing debt, and buying bonds, without the dollar imploding.”

— Peter Schiff

“As the dollar’s exchange value declines, so will the value of dollar-denominated financial instruments, regardless of how many bonds the Federal Reserve purchases.”

— Paul Craig Roberts

“Dollar bills have absolutely no value except in our collective imagination, but everybody believes in the dollar bill.”

— Yuval Noah Harari

“Historically, gold has always been a safe haven against inflation and a safe haven in times of political instability.”

— John Paulson

“In reality there is no such thing as an inflation of prices, relatively to gold. There is such a thing as a depreciated paper currency.”

— Lysander Spooner
Source: Visual Capitalist.
Source: Visual Capitalist.

Our dollar-money is about to become worthless, so use it now to buy gold. How many times have I read this pitch recently? The dollar has lost only 98% of its value since 1913. Just 2% to go, right? Well, the real story is different and critically important to surviving the hard-times that are surely coming – fast.

You have no doubt heard that Central Bank Digital Currencies (CBDCs) are being rapidly moved into place to take over for the steadily-failing dollar in its role as a medium of exchange – cash. As the dollar becomes effectively worthless both as a store of value and as a medium of exchange, the digital money replacements are ready to roll. Surprise.

This enormous transition is not just in the U.S. but globally. Even Russia has announced its digital ruble, and Russia’s money situation appears relatively solid – at least for the moment. There is much more going on here than dollar woes.

Paper money is just an IOU from a bank or government

You got paper money (cash) or a paper check in exchange for work – your labor. In the good old days, you would probably be paid in gold or silver coins, or in something useful like food or chickens. Both of these could be stored or exchanged, and thus they met two of the three attributes of money. The third attribute – trust that the value was stable – would also likely be met. Unlike paper money and paper checks (or electronic deposit equivalents).

Your ”money” as cash has been depreciating for at least a century, so that its purchasing power has declined by about 98% over that period (1913-2023). In case you haven’t noticed. Worse yet, your “money” as cash or check goes into your bank account and instantly becomes digital bits and bytes, stored in a cloud somewhere. Will the bank make good on these deposited amounts?

We hope. But in hard times of various flavors, banks fail and your money goes “poof” or some electronic vanishing equivalent. Much better to have this money in gold, as the gold-mongers advise ad nauseum. With gold instead of paper or digital bits, you could store it safely under the bed or other secure place. Then, when you need to buy something like food perhaps, you can take your gold and … do what?

First, you would have to find someone selling food who also accepts gold (assuming coins here). You have to buy an amount of food that matches the coin’s value, or plan on cutting coins in pieces. Not a good plan. Also, carrying gold coins around may even attract thieves, if you can imagine such a thing. You may thus want to go shopping in groups, with armed members.

You can see pretty quickly why paper (fiat) money was invented. Even though it is intrinsically valueless, it can be printed in many handy denominations. You have to carry only enough to buy what you need, discouraging thieves. This scheme works fine so long as the paper money value remains mostly stable.

Paper money value seems anything but stable

Well, it is declining at a fairly stable rate, but by “stable”, we generally mean not-declining except for occasional wobbles up and down. Governments have debased currency – even that tied to gold – since Roman times, and probably long before. Governments are mostly not kindly, preferring to do whatever benefits themselves rather than their unwitting electors or servants.

I have addressed money several times in past. See here, here, and here as examples.

Looks like money, but it is just printed paper that declines in value daily.
Looks like money, but it is just printed paper that declines in value daily.

Gold is stable in value by definition

Okay, so gold is a hassle to use for everyday life. But at least its purchasing power is stable. Kind of, at least. Gold’s value is defined with reference to other currencies, such as the U.S. dollar, which is owned by the U.S. Government (sort of – actually by the Federal Reserve Bank, a major-banks-owned corporation).

The gold price in U.S. dollars was stable at about $20 per troy ounce from 1833 to 1932. Something irregular happened in 1933, causing the gold price to be set at $35. Around 1970, gold prices started to increase noticeably for other irregular reasons that you can read about. From Investopedia:

“In 1971, the U.S. abandoned the gold standard entirely, as it was no longer able to back up the value of its currency with gold. Instead, the U.S. and other countries moved to a fiat currency system, which means that the value of a currency isn’t pegged to a specific commodity or metal, but rather backed by the faith in the government and its ability to collect taxes. Once unpegged, the price of gold rose dramatically.”

Gold has been fluttering around $2,000 in value for the past several years. When the next irregular something happens – probably in 2024-25 – gold may take another major change in market price. The U.S. dollar continues to decline in price relative to gold, so the dollar price of gold is likely to continue upwards.

Very confusing unless you are a gold trader or government gold hoarder. Is gold fluctuating in value, or is the dollar fluctuating in value? Or worse yet, both? Probably both …

Source: Investopedia (link above).
Source: Investopedia (link above).

Gold is good to have so long as its price (in devaluing dollars) is going up. Wait … if I use gold to buy food priced in declining-value dollars (i.e., food prices going up), I maybe break even? So, who needs gold.

Storing your gold is yet another problem

Gold is a thievery magnet, so I recall reading somewhere. Better to store your gold in a bank or other completely safe place. It will always be there when you need it, provided the storage place doesn’t go bankrupt or gets itself thieved. Including that done by governments – as in gold confiscation by the U.S.:

May 1, 1933 – President Roosevelt’s Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($167,700 if adjusted for inflation as of 2010) or up to ten years in prison, or both. An exception to the order was listed in section 2 (b) ‘Gold coin and gold certificates in an amount not exceeding in the aggregate $100 belonging to any one person; and gold coins having a recognized special value to collectors of rare and unusual coins.’”

Jan 30, 1934 — The Gold Reserve Act of January 30, 1934 required that all gold and gold certificates held by the Federal Reserve be surrendered and vested in the sole title of the United States Department of the Treasury and changed the value of the dollar in gold from $20.67 to $35 per ounce.”

1954 – In 1954 the Treasury Department amended the Gold Regulations of the original Executive Order to enable the continuance of the exemption of rare coins from the gold confiscation provisions, and they expanded the definition of ‘coins’ with a recognized special value to collectors of rare and unusual coins to include ‘gold coin made prior to April 5th, 1933 (Federal Register 4309, 4312 1954, as codified in 31 CFR Section 54.20).”

Aug 15, 1971 – The price of gold remained fixed from Jan 30, 1934 until August 15, 1971, when President Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus abandoning the gold standard for foreign exchange.”

Great. If the gold thieves outside don’t get your gold, your government will, if and when it has a mind to. Convert your savings into gold, then the government takes your gold, and gives you in return paper money that depreciates. Right back where you started.

There must be a better way to protect ourselves

Well, how about prepper folks who have done an enormous amount of thinking about prepping and planning … but for what? Hard times? Of what particular flavor? And what is the likelihood of this particular flavor occurring?

John Day, former family doctor in Texas, via The Automatic Earth, has a pretty good description of how he sees things: “Grasp Historical Initiative”:

“One might get out of debt and get out of all risk assets, maybe hold physical cash, food, water, propane, a camp-stove, and invest in a safe place in a small town, with mixed local industry, good soil, and a long, peaceful agricultural tradition. Having a good water-well with a solar-powered pump is a remarkably practical investment. [I think planning to rely mainly upon firearms is delusional.]”

“We are social beings. Figure that you will entertain family and maybe friends for extended stays when the financial system breaks down. Understand your regional economic stressors, and how they would flex under duress, like power going out and internet going down, even water, gas and sewer. No trash pickup for a few weeks is something many urban dwellers have experienced. A lot of things morph unexpectedly. How might we live and sustain ourselves in our new economic system? Will the weather try to kill us? Can we devise a low-input lifestyle, and hold a buffer of necessities?”

“Will forms of civil-war or gang/cartel war come to our area? Is there enough loose wealth to attract those predators? Do we look like prey? There are other strategic forms of initiative which one can take. I had long wondered how to spot the Holocaust, Bolshevik Revolution, Cultural Revolution or ‘killing fields’ early enough to get away in time. We taught our kids about this recurring human pattern. We didn’t know what the definitive sign would be, but I stayed vigilant. When I saw the sign, which was the creation of a human underclass, without rights to bodily autonomy, employment, travel, or even speech, I knew that the dangerous time had arrived.”

As you can see, even a practical medical professional really has no clear idea of what to do in case something nasty happens. He seems to be asking the right questions at least, many of which I would also think to ask.

The problem of course is that we have no idea about what will happen. We can only puzzle over a huge number of possibilities, each having a very tiny probability. How can you plan and prep for something that is unpredictable in nature, magnitude, and timing? Kind of like a black swan happening, yes?

Enough to get you through the first month or two. Then what?
Enough to get you through the first month or two. Then what?

A thinking exercise on preparing for the unknown

WARNING: You may not want to read any further. What follows is an exercise, my own, in thinking about what might happen in the very near future, and what if anything I might be able to do about it by way of preparation. The vast majority of people do not even want to think about hard times until they actually occur, and even fewer will take concrete steps to prepare for such times. Such is human nature. For the very few who remain, here is what I see as preparation:

Note: You may be very surprised at where I come out on this exercise.

Our starting place for this survival planning exercise, or at least my starting place, would be to recognize that we have no idea what form our personal version of truly hard times might take. It seems likely to be highly variable, depending on location, luck, resources, luck, situation, and luck.

One rather unpleasant situation and outcome would be one of non-survival. Personal and/or kin. If kin survive and I don’t, what might I do to help assure them have as great as possible chances of survival? Or, I might survive and despite my best efforts, but they may not.

The question here seems to be one of dealing effectively with – surviving – whatever may come along. What can I do now to help with this rather important challenge even if my survival does not in the grand scheme of things occur?

The good news here, if such a term is appropriate for this existential challenge, is that people have been dealing with this challenge forever. Who truly knows what tomorrow will bring upon us? The Romans? Look at what a mess their world turned into, and they had enormous resources. So many non-survivors despite so many advantages. Black Death? This surprise killed an estimated 75 to 200 million people, including up to 60% of the European population – in just a few years.

How might one prep for either of these catastrophes, one extended and the other rather brief? The answer is that you can’t. Your odds of doing the right prep-thing are about 0%.

This means that we have to prepare for the unknown unknown. Gold isn’t the answer.

Preparing for the unknown in practice

I have written some about this very thing quite a while ago, back in COVID days. See for example, here, and here. The basic principles are:

  • Resilience
  • Agility
  • Adaptability

Resilience means that you can survive significant hits from almost whatever source and survive. Or even recover to a great extent. It aims at identifying and strengthening your main points of weakness, vulnerability.

Agility means that you can move quickly on short notice if required. It aims at eliminating hard-to-adjust ties and building up a set of ways to respond with little or no delay.

Adaptability means that you have built-in flexibility to adjust so as to survive, and enough creativity to generate effective responses to surprises on the fly. Darwin saw adaptability as the key to survival, rather than being “fittest”.

My earlier posts on this subject were aimed at businesses and organizations. This one is aimed at oneself and family, kin, and close friends. A kind of tribe, if you will.

Basic human needs

Since we humans are fundamentally critters, we share three basic needs with such:

  • Food
  • Shelter
  • Water

Absent any one of these for more than a brief period, survival gets iffy very fast. First question is how severe might each of these have to be for serious survival planning and prep purposes?

My answer here is: kind-of-awful, moderately-awful, and exceptionally-awful. Personal survival is assumed, since the goal here is to help the tribe survive whether or not I make it. Why three? Three is a standard planning case set: best; middle, or most likely; and worst. In a real survival context, we would probably be dealing only with one of three worst-case (awful) scenarios.

Food: The “best case” is that food becomes very hard to find, with limited selections and storage/shelf-life being a major concern. The “middle-case” is that external food sources effectively disappear, leaving only whatever can be grown, picked, or hunted locally. The “worst-case” is that food must be gathered wherever it can be found as part of a rather migratory existence.

Shelter: The “best-case” is that you have a home base of some sort, along with at least two accessible alternatives. The “middle-case” is that you are likely to be restricted to your home base or current location. The “worst-case” is that you have no permanent shelter, and that you have to find it wherever you can as a temporary solution.

Not too fancy, but at least it’s pretty well hidden.
Not too fancy, but at least it’s pretty well hidden.

Water: The “best-case” is that you have reasonably secure access to at least three sources of water, and that you have a way to boil enough potable water in each location. The “middle-case” is that you only have access to water nearby your home base or current location. The “worst-case” is that you will have to find water wherever you can on your migratory existence.

A pretty grim outlook, yes? The idea here is to figure out just how you might deal with each of these awful survival situations. There is of course some extreme-extreme, such as the worst-worst-worst situation where you are forced into a migratory or transient existence.

The human nature option is waiting until the last possible moment – when you are forced to act. This approach is likely to leave you with very few, very poor, very iffy choices. Or maybe no choices at all.

Tribal or “community” planning

Humans being social animals, there is a natural tendency to seek others as part of whatever you may be up to. Tribes in past tended to be made up of related people, so today a “community” of likeminded and compatible folks may work better. As a test step, can you list potential members of your own hypothetical “community”, without regard in general for whether they may be interested?

You probably want to include mostly creative, adaptable, strong, and resourceful members since you have no idea what you may have to deal with as your reality rolls out. Thought would also have to be given to assembling such a group on short notice. It would be valuable also to have a mix of essential skills.

Essential skills would lean toward those that would strengthen the group’s ability to obtain food, shelter, and water under very difficult conditions. Hunting, building, gardening, medical treatment, sewing, … long list, but these few should suggest others.

You want also to have diversity of resources available to the group on short notice. These should be in more than one location, and should include several pieces of critical items like tools.

Preppers tend to stress hoarding of supplies, but you may well not have storage for more than a short period of use. And stored supplies are targets for thieves and worse. Thieves can’t steal skills.

Stocking up on exchange goods

Under all but the most favorable cases, money is likely to be worthless. Gold and similar valuables, as noted earlier, may be risky in terms of theft and confiscation. What may be useful is a range of goods for exchange. Medical supplies, tools, lumber, chickens, ducks, pigs, seeds, firewood, …

The idea here is to have such goods in the form of things least likely to be targets for theft. This would include bulky items like lumber and items that you can make as needed. It may also include skilled labor that can be exchanged for food, medical supplies, and other essentials.

Make as much as you can

Essentials that you can make with your group’s available skills seem vital. You can make items both for your own use and for exchange purposes. If you have a member with chemical or pharmaceutical knowledge and some basic raw materials, you can make both usable and exchangeable items.

Shelter includes defense

More than just a roof and walls, shelter should be as inconspicuous as possible to passerby’s. Low and natural colors. Smoke from cooking and heating fires should be vented as low to the ground as possible. Location should be up on a hillside near a forest with abundant firewood. Also near a reliable source of water.

The buildings should be well-fortified like the ones you see in old western movies like The Outlaw Josey Wales and The Searchers. The buildings should have room for animals like chickens, cows, pigs, horses, and such.

Storing vital documents

In the likely absence of electricity, it seems important to have hard copies of vital documents. USB drives will not work unless you have a solar- or water-powered generator. There are all kinds of these available today. Probably good to have both types and two or three of each.

Communications gear

If you have a local power source, you may be able power up radios and other low-tech communications gear. Keeping in mind of course that others may also be able to tune into your outbound signals.

Local self-sufficiency is the goal

As much as possible, your essential needs should be locally (community) produced. You want to be as self-sufficient as you can. For items that you can’t produce locally, you may be able to obtain from nearby groups.


While it may be nice to have a few horses and a wagon or two, these big animals require substantial amounts of food and care.


Without a local power source, your digital media will be of no use. And in a survival situation, communications from external sources may be unavailable. Your reading will have to come from hard copy items, formerly known as books.


You will almost certainly need hunting weapons and game dressing knives. Guns will likely be used also for defense, but only so long as bullets are available. A more practical weapon for hunting and defense might be a high quality bow and arrow set or several.

One could go on indefinitely here, but these points should suggest the scope of action likely to be required.

The hardest part: Getting started and staying committed

As difficult as the preceding prep chores may appear, the greater hurdle is simply deciding to start and then staying committed. It will be so much easier to spend much time on talk and other digressions. The first real action steps will be hardest, but most important. Once some serious progress has been made, it will encourage all involved to continue. Until …

What if nothing serious happens in your world while you are making all of these time-consuming and somewhat costly preparations? What if the world appears to be bumbling along in its usual manner? Enthusiasm and commitment are likely to wane appreciably. Some members may drop out for all practical purposes.

This is where strong leadership is required. This is why tribes had chiefs. A community without a strong committed leader will fail.

Tribal chiefs were vitally important. Sitting Bull, chief of Hunkpapa Lakota, was also a medicine and holy man. A real leader.
Tribal chiefs were vitally important. Sitting Bull, chief of Hunkpapa Lakota, was also a medicine and holy man. A real leader.

Where I have come out on this hard-times thinking exercise

The preceding view of some pretty awful future possibilities is beyond grim. One might even begin to think of non-survivors as the fortunate ones. I don’t. While the future may actually turn out to be as nasty as in this exercise, it may well turn out to be less-nasty, and possibly even with some pockets of real hope.

My personal view is that a less-nasty-with-hope scenario is most likely. Serious planning should aim at a most-likely case, not at either extreme of best or worst.

This scenario opens up a wide range of ways to survive and even prosper. The most portable and reliable resources for such a situation are personal skills, creativity, and knowledge. Not gold stashed away waiting for thieves. What you carry as internal resources is almost certain to be far more valuable.

On this basis, planning and prep would likely focus on particular skills. Some you already have, and some that might provide a bit of skill diversity. These may well require some specialized tools or equipment, which then become an action item.

You can easily see where this is headed. My planning and prep would likely be quite different from others because of my personal skill set, knowledge, and interests. I would also want to be as mobile on short notice as possible, minimizing and eliminating any serious commitments and ties. It might good as well to locate a few likeminded folk for a possible community core. 

And I would want to make resilience-agility-adaptability my primary goal set.

Bottom line:

Fiat money is steadily depreciating and may even disappear shortly, being replaced by digital money (CBDCs). Gold is not an answer unless you are a government or large organization.

While there are many extremely nasty scenarios for our near-term future, the most likely to me at least is one in which the nasty part is not extreme and is somewhat localized.

There will almost certainly be pockets of promise and opportunity for those who have a strong and flexible set of hard-times skills, who are creative and resourceful, and who can contribute significantly to group efforts as these arise.

“As President Hoover famously told Franklin D. Roosevelt:
‘We have gold because we cannot trust governments.’”

“President Herbert Hoover’s statement in 1933 to Franklin D. Roosevelt foresaw one of the most draconian events in U.S. financial history: the Emergency Banking Act occurred that same year, forcing all Americans to convert their gold coins, bullion and certificates into U.S. dollars.”

“While the Act successfully stopped the outflow of gold during the Great Depression, it did not change the conviction of gold bugs, those who are forever confident in gold’s stability as a source of wealth.”

“Before investing in gold, you must understand its history — a history that, like that of no asset class, has a unique influence on its own demand and supply today. Gold bugs still cling to a past when gold was king. But gold’s past includes also a fall, which must be understood to properly assess its future. For 5,000 years, gold’s combination of luster, malleability, density and scarcity has captivated humankind like no other metal.”

“Europe’s introduction of paper money occurred in the 16th century, with the use of debt instruments issued by private parties. While gold coins and bullion continued to dominate the monetary system of Europe, it was not until the 18th century that paper money began to dominate. The struggle between paper money and gold would eventually result in the introduction of a gold standard.”

“The gold standard is a monetary system in which paper money is freely convertible into a fixed amount of gold. In other words, in such a monetary system gold backs the value of money. Between 1696 and 1812, the development and formalization of the gold standard began as the introduction of paper money posed some problems.”

“In 1797, due to too much credit being created with paper money, the Restriction Bill in England suspended the conversion of notes into gold. Also, constant supply imbalances between gold and silver created tremendous stress to England’s economy. A gold standard was needed to instill the necessary controls on money.”

“The confirmation by Russia that a trade settlement currency for an expanded BRICS is on the agenda at the Johannesburg summit later this month has barely been reported, and even sound money advocates are highly skeptical.”

“But all will be revealed in three weeks’ time. Meanwhile, this article looks at how gold standards could return in the wake of a new gold-backed trade settlement currency, if that is what emerges, using the currency board model as a template.”

“This is followed by an explanation of why gold reserves must cover the bank note issue. I assess the cover afforded to both the ruble and the renminbi, incorporating assumed levels of non-reserve gold bullion held by both Russia and China. The conclusion is that both nations have ample cover to implement proper gold standards. And that gives the opportunity for other allied nations to implement currency boards with the renminbi. The availability of above ground gold stocks to support a global retreat from fiat currencies back to the stability of legal money – gold – is then addressed.”