Gold loses value in Mad Max scenario; water, food and bullets rule

Gold is worthless without an economy: water, food and bullets

In a Mad Max-style collapse scenario, gold loses its value because it cannot be eaten. This is the prevailing conclusion in an economic analysis circulating on social media and forums, sparked by claims that people in Dubai were trying to buy food with gold unsuccessfully. The discussion, which has accumulated over a hundred replies, has turned into a mini-treatise on what retains value when the financial system goes awry. And the answer is not exactly what those hoarding bullion expect.

The starting point is an unverified claim: in Dubai, with the region tense due to the war with Iran, some shops would be refusing gold as payment. From there, the analysis unfolds in several directions. Some argue that gold only functions as currency when there is a financial framework to back it; without it, it is worth less than lead or copper. Others recall that in real episodes of hyperinflation and war — Venezuela, Argentina, former Yugoslavia — gold did serve for exchange, although always in highly fractional formats and with brutal discounts. The discrepancy is significant: it touches the very essence of what money is.

Water, food, energy and ammunition: the order of priorities

The list of what truly matters in a collapse repeats with few variations: water, food, energy and weapons. From there, each person adds their own layer. Some add antibiotics, lighters, toilet paper and chocolate. Tobacco appears as an almost perfect barter currency: it weighs little, is easily divisible, and there are always smokers willing to trade anything for a cigarette. Coarse salt, charged batteries, or lighter gas are also cited as barter assets. Silver, for its part, is defended as a better option than gold for small transactions: an ounce of gold forces you to buy whole pallets, while a silver coin can pay for a meal.

Gold, however, drags along a practical problem that no one disputes: to buy bread, you have to carry a four-gram pendant that would be worth hundreds of euros in the formal market, but whose value no one could assess in a survival barter. The anecdote cited is that of a shopkeeper who refuses gold because he cannot give change or verify its purity. In that context, the precious metal becomes an uncomfortable liability: it weighs, can be stolen, and is not edible.

Gold in Venezuela and other broken economies

The experience of countries that have gone through deep crises nuances the discourse. In Venezuela, gold has functioned as a refuge and as a means of payment in certain circuits, according to various testimonies. In the Bosnian war, alcohol, tobacco, drugstore products, and even board games were used as currency. In Ukraine, during the 2014 clashes, there is the account of someone risking their life to pull a gold ring off a corpse's hand in the street. These examples show that gold does not disappear entirely, but its value depends on the degree of social decomposition: the more the scenario resembles Mad Max, the less useful it is.

The prevailing conclusion is that gold retains value as long as a remnant of economic order remains. When that order is restored, even precariously, the metal appreciates again. The problem is the interval: in pure chaos, gold is just a shiny, heavy object. The discussion then shifts to the role of cryptocurrencies, which in a scenario without electricity or internet would be worth even less.

The yen carry trade and the Japanese financial bomb

The analysis gets entangled with current financial affairs. A supposed financial bomb of up to four trillion dollars hidden in Japan is mentioned, related to the yen carry trade, and speculation arises that the war with Iran might have lit the fuse. The figure, which has not been verified with official sources, serves to remind us that global markets are interconnected and that a burst at one point can drag down all assets, including gold. In that sense, some participants note that gold would also fall in a systemic crisis, at least in nominal value.

The conversation jumps from bullion to solar panels. It is pointed out that gold is used in satellites and electronic components, and that silver has industrial applications in photovoltaic panels and batteries. This leads to questioning whether, in a post-apocalyptic scenario, the value of gold could come from its technical utility rather than its monetary function. The answer, once again, is that without industry, there is no technical demand to sustain the price.

The shopkeeper anecdote and physical cash

Among the practical examples, there is the case of someone who tried to pay at a supermarket with an ounce of gold and encountered the cashier's refusal. The scene, real or invented, illustrates the metal's liquidity problem. In crisis situations, physical cash in small bills can be more useful than gold, because it allows payment without needing appraisal or change. Silver, again, posits itself as a more manageable fractional currency.

The discussion also addresses the role of the State. It warns that in a collapse, the State itself could confiscate gold, as peine in the past in other countries. Against this, the implicit recommendation is to diversify: have some metal, but also reserves of water, food, and means of defense. The conclusion, if there is any, is that gold is not a universal insurance, but an asset conditioned by the environment. And that in a real Mad Max, the king is the brass of the bullets.