Post-doomstay currencies
The thought of what will likely happen after a nuclear exchange by the leading powers is unimaginable. While the discussion of this topic was largely poohpooed decades ago, today’s inflamed rhetoric between North Korea and the United States, the aggressive maritime claims of China which will impact seaborne trade and the annexation by Russia of territories of the Ukrainian Republic do not make this an event that must be taken lightly. Many have opined that a nuclear exchange will spell an extinction event for mankind if all the nukes stored are let go.
While that may be possible, the probability is high that some of mankind will continue to survive, and there is historical evidence that this is entirely possible.
More than 60 million years ago, an asteroid which was of an extinction-event class, crashed into earth. The asteroid was about 15 kilometers across, meaning its tip was already crashing into earth, while the rest of it was still higher than most commercial jets fly today. It crashed somewhere in Mexico with the equivalent force of more than 20,000 Hiroshima bombs. This far exceeds the known number of nuclear warheads in existence today, as partially monitored by the SALT Treaty between Russia and the United States.
Whatever it was, in a strange way, it made extinct the huge dinosaurs of the era and gave rise to the mammalian species which ultimately evolved into mankind. In a similar fashion, while a huge portion of mankind will perish in a nuclear exchange, it is likely that a substantial number will survive and ultimately repopulate the earth. It is unlikely, for example, that the nuclear powers will target Iceland, or Greenland or New Guinea which have no militarily strategic significance.
It is also very likely that the Philippines will not be worth targeting with nuclear missiles, as these will not be wasted on tertiary targets as nukes represent a limited but significant military bargaining chip. Instead, most of the nukes will be aimed at destroying each others’ capability to retaliate or to destroy entire military-industrial complexes. The theory that the Philippines will not be worth a nuke will be negated if we provide shelter or bases through which any of the nuclear powers may use to strike at any enemy. As it is, however, the Constitution provides that the Philippines will be a nuclear-free zone and this might be a source of comfort for us, as this would mean that we will not allow any country to store, much less launch nuclear strikes from Philippine soil.
If indeed this hypothesis will transpire, then this article seeks to identify what kind of economy will likely be shaped after the event. First, we assume that the Philippines may suffer damage from conventional high explosive bombs, rockets and shells. While this may be damaging, we may expect that within weeks after the exchange, there will be an all-clear through which we may repair the damage and get our economy going again, just as we did after World War II.
In the interim, food and water will probably constitute the highest form of exchange as it is likely that the public will take time to adjust the value of the peso to the new conditions. This may be a source of comfort that the peso, after a significant period of adjustment, is likely to still be legal tender. This presumes that the government will quickly recover to restore order, and has not been the victim of a nuclear strike. This has been demonstrated in the aftermath of World War II.
Second, physical gold, precious metals and jewelry may become useful for the short run as mediums of exchange, as mankind has, through millennia, realized the rarity of gold and gems will hold value through the ages.
Third, assuming that the Torrens Tile records are still intact, or that somebody will have had the brains to store the encoded data in an off-site storage for just such events, land may later be a store of value and a medium of exchange. Land is generally a long-term investment and its value may take long to establish assuming a period of confusion after things have settled down.
The bitcoin currency assumes that the servers that hold the electronic data will have survived the electromagnetic pulse (EMP) generated by nuclear blasts, notwithstanding that the data is hidden in offsite location. If the servers are shielded against EMP, then perhaps the bitcoin will survive as a currency, but if not, then bitcoin becomes worthless as a currency.
As a whole, there will likely be a barter economy prevalent until food production will have stabilized and until some form of government will have stabilized the situation. The Philippines is fortunate that we do not principally rely on exports to drive our economy and that food production is generally in equilibrium with the population. After the rubble has been cleared, which will likely take months, production will resume.
Fears of the nuclear winter are likely exaggerated as the nuclear exchange will occur principally among the nuclear powers. The resilience of nature to adversity is best seen in the example of Chernobyl where it was feared the radioactivity would make it inhospitable to life for hundreds of years. Instead, in a mere 15 years, wildlife is thriving in Chernobyl.
Doomsday scenarios abound, but I am a reasoned optimist, believing that mankind will survive its own worst behavior.