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Are you prepared for Armageddon?
We’re not talking about a concrete bunker 30 feet below ground. We’re not talking about a store of AK-47s, five years’ supply of canned food and some anti-zombie defence. We’re talking about…actually, maybe we are talking about that kind of Armageddon. Let’s say North Korea sends a ‘nuke’ over to Seoul via airmail. And let’s say the US reply with their own ‘postal service’. We would be confident that stock markets around the world would fall. It’s pretty rare that markets rise on the prospect of global warfare (to start with, at least). Often they’ll quickly realise that it’s not as horrible as it seems and then march on to record highs. But only after falling initially.
But with the world almost constantly anticipating a Third World War, you have to ask, what will happen if there actually is one? Will you need to brush up on your hand-to-hand combat skills? Probably. But that’s what Liam Neeson movies are (now) for. Will you need to learn the basics of survival, including how to find water, track food and navigate without Google Maps? Probably. But that’s what Google Maps ‘offline mode’ is for. Those things are important. But more important is your financial preparation. So, are you prepared? Financially? If war breaks out or any other massive crisis, are you financially ready for it?
You might say yes. You might have moved your money into cash. And you’re now safe, secure and sitting pretty. But what if not even cash is safe in all-out war? Are you 100% confident that you’ll be able to get your money out of the bank? Can you say for certain that the ATMs will still work? Really? Ask the people of Cyprus how the ATMs were in 2013. OK, so maybe you store your cash under the bed. Or maybe you have gold. Two reasonable defences. But they’re no good to you if war doesn’t break out. Remember there is no war right now. There might be in the future. But there might also not be.
So then you’re pretty screwed too. That cash isn’t going to work for you while there is no war. And that gold? Well it might go up in value a little. It might lose value a little. At best it might double your money one day. That’d be nice. Wrong. That’d suck. Doubling your money is no good. That’s not what you invest for. You invest to make five, ten, 100 times your money. That’s where real wealth is made. But how can you even contemplate returns like that when we’re on the brink of war or crisis?
At this point, you might anticipate I’ll be suggesting buying stocks. Small-cap, microcap, or technology stocks. But again, you’d be wrong. What if I said there was a way to hedge yourself against a crisis that didn’t involve stocks? What if there was somewhere to put your money that works for you when things are great and works even better for you when things are rubbish? Would that be something you’d want to know more about? Making money when things are good. And making money when things are bad. All in the one kind of investment. Sounds like that ethereal money tree, doesn’t it?
Well I used to think money trees were as real as a leprechaun riding a unicorn. And then I discovered bitcoin back in 2010. In its early days bitcoin was the money tree. You could simply use a (reasonably powerful) computer to ‘mine’ bitcoin. If you were successful in ‘mining’ a block on bitcoin’s blockchain, you’d get 50 bitcoin. Mining just one block back in 2010 would today be worth US$66,500. But back then 50 coins was actually worth about US$150.
Today mining bitcoin is way harder. It’s near on impossible for an average user at home to ‘mine’ blocks. Today for people like you and me, the easiest way to get bitcoin is to buy it. And that’s something I’ve been advocating for a while now. You see, bitcoin is one of the best hedges against crisis or war that I’ve ever seen. The primary reason is because a central bank or a government does not control it. It’s a distributed, decentralised system that allows people to anonymously store wealth. And when there’s a financial crisis, bitcoin tends to do very well.
Chuck Reynolds
Contributor
