"Why To Own Money You Can Touch"
by Bill Bonner
Poitou, France - "From India.com comes worrying news: "Meta CEO Mark Zuckerberg is building a huge bunker complex in Hawaii for $300 million, along with backup properties in Palo Alto and Lake Tahoe. Elon Musk is building a huge complex in Texas, OpenAI chief Sam Altman has a secret underground palace, while Amazon founder Jeff Bezos has also built a secret luxury palace for himself to live in during doomsday, i.e. the day a nuclear war will break out.
Zuckerberg's most ambitious project is on the island of Kauai in Hawaii, where he has 2.3 square km of land, which is three times bigger than New York's Central Park. Here, Zuckerberg has built two luxurious mansions and a treehouse. There is also a huge underground shelter here, which is being built at a cost of billions of dollars."
The odds of dying in a nuclear war are, we hope, low. And the costs of trying to protect yourself are definitely high. It has been eighty years since the US dropped atomic bombs on Japan. Maybe they will never be used again? Or maybe this long hiatus has given us a false sense of tranquility?
Killing is generally frowned upon...and outlawed...unless, as Voltaire told us, it is “accompanied by the sound of trumpets.” Private murder is a no-no. But government killing is a matter of national pride. Often the killers are memorialized as national heroes. What probably prevents the use of nukes is fear of “mutually assured destruction.” The US dropped atomic bombs on Japanese civilian targets. At the time, America was the only nation to have nukes. It risked little. But today, nine nations are believed to have nuclear weapons...with about 12,000 warheads in existence. These countries are not likely to be any more ‘civilized’ than the US in 1945. So, any major conflict may set off a nuclear exchange.
If you have a substantial bunker (or a bolthole)...and if you could get to it when you needed to...it could save your life. Definitely a plus. For a multi-billionaire, the cost is insignificant. So, even if the likelihood of actually using the place is small, there’s no reason not to do it. But for normal people, is it worth such a substantial investment? We have no answer to that. So, let us try another question. What is the most likely catastrophe we are likely to face...and how can we protect ourselves? For an answer, we turn to today’s real-life, in real-time catastrophe, playing out in Gaza.
In Gaza today, the banks are closed. ATMs don’t work. There is no electricity. There is often no food or water either. But even if there were food available, there would be no money to buy it. A report from Gaza, courtesy of Al Jazeera: Civil servants have gone months without pay. NGOs are unable to transfer salaries to their employees. Families cannot send remittances. What once supported Gaza’s financial structure has vanished. If you manage to obtain money from outside sources - perhaps from a cousin in Ramallah or a sibling in Egypt - it comes at a cost. A brutal one. If you get sent 1,000 shekels ($300), the agent will hand you 500. That’s right, the commission rate on cash withdrawals in Gaza is now 50 percent.
Poor Zuck. He probably travels the world with his credit cards and accountants. But what if the electrical grid is attacked when he is in New York? Do his bodyguards reach in their pockets, pool their cash, so they can buy a hamburger? Do they have enough gas to take him back to the airport where his private jet is waiting? Is it able to take off and land...with no juice on the ground? No matter. He’ll make it to his island stronghold. Somehow.
But how would it work for most people? There is only about $2.3 trillion in physical currency in the US - not even a tenth of GDP. In a crisis, people hoard money and food. And as the economy seizes up, supplies of goods and services quickly run out...and prices soar. Physical money becomes extremely valuable...and hard to get. In Gaza today, for example, a ‘bag’ of flour now sells for $300:
Do you have a bank card? Great. Try using it. There is no power. There’s no internet. No POS machines. When you show your card to a seller, they shake their head. People print screenshots of account balances that they cannot access. Some walk around with expired bank documents, hoping someone will think they’re “good enough” as a pay guarantee. Nobody does.
What about bitcoin? In Gaza today, money you can’t touch is equivalent to no money at all. Where does that leave people? At the market, I saw a woman standing with a plastic bag of sugar. Another was holding a bottle of cooking oil. They did not speak much. I just nodded. Traded. Left. This is what “shopping” in Gaza looks like right now. Trade what you’ve got. A kilo of lentils for two kilos of flour. A bottle of bleach for some rice. A baby’s jacket for several onions. There is no stability. One day, your item will be worth something. The next day, nobody wants it. Prices are guesses. Value is emotional. Everything is negotiable.
“I traded my coat for a bag of diapers,” my uncle Waleed, a father of twins, told me. “He looked at me as if I were a beggar. I felt like I was giving up a part of my life.” Gaza is a very special case. It is being intentionally deprived of money...and things to buy. But there are many things that could cause a collapse of the power grid. Earthquakes or solar events...physical or cyber attacks...even extreme heat. We don’t know how likely it is. But the insurance is cheap. Make sure you have some form of money ‘you can touch.’"
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