When IOUs Break: Why Only Real Assets Survive a Debt Reset

For a century we’ve treated government and bank IOUs as “safe.” But when total debt > GDP by ~300% globally and purchasing power has been bled for decades (the dollar has lost the vast majority of its value since the early 1900s), safety isn’t in paper promises it’s in things you can use, own, and sell without asking a central bank’s permission .

The core problem

• Debt compounding + economic growth. When debt stacks outruns GDP, the system leans on:
  

  • Higher taxes/fees (bleeds the real economy)
    

  • Financial repression (rates < inflation)
    

  • Devaluation (you’re repaid in weaker money)
    

• IOUs depend on trust. If the issuer’s ability or willingness to pay in real terms falters, your “safe” asset isn’t safe it’s the shock absorber for the system.
  

What actually holds value in a break

When credit cycles snap, usefulness and scarcity matter more than yield:

1. Real estate (essential, cash-flowing, low leverage)
   

   • Shelter and productive land remain indispensable.
     

   • Focus on essential demand (primary housing, workforce rentals, agricultural/utility land).
     

   • Keep leverage modest so rents or harvests carry the note even when credit tightens.
     

2. Operating businesses that sell necessities
   

   • Food, energy, basic transport, repairs, medical/dental, utilities, compliance services.
     

   • Businesses that convert inventory into cash quickly and can reprice with inflation.
     

   • Own outright or via private deals with clean balance sheets and simple unit economics.
     

3. Precious metals (outside the banking system)
   

   • Physical gold and silver with verifiable custody.
     

   • No counterparty required; historically used to bridge currency resets.
     

   • Treat ETFs and unallocated products carefully if your thesis is counterparty failure.
     

4. Digital scarcity (Bitcoin)
   

   • Fixed-supply, bearer-style asset that settles outside banks.
     

   • Volatile, but policy-independent; size it so you can ignore drawdowns.
     

Practical playbook (no bonds, no T-bills)

• Liquidity you’ll actually use: a small operating cash buffer (for bills/ops) and the rest pointed at real assets.
  

• Real estate filter: buy what would be rented or used tomorrow if listed at market; lock in long-life capex; avoid trophy leverage.
  

• Essential businesses: prioritize inventory turns, pricing power, and repeat demand; avoid models dependent on cheap credit or discretionary splurges.
  

• Metals discipline: decide % weights (e.g., gold core, silver satellite), pre-choose custody (home safe vs. insured vault) and audit schedule.
  

• BTC discipline: cold storage, pre-set allocation bands, no leverage.
  

• No-duration trap: if it’s an IOU from the fiat stack (long bonds, “high-yield” credit), treat it as risk, not ballast.
  

Risk notes (be sober, not scared)

• Real estate: illiquid, taxed, and policy-sensitive; buy cash flow first, appreciation second.
  

• Private businesses: operational risk; insist on clean books, simple covenants, and downside plans.
  

• Metals/BTC: price volatility; solve with position sizing and time horizon, not trading.
  

Bottom line

If you believe a real economic crash is inevitable, paper promises won’t save you. Concentrate on tangible, useful, scarce assets: cash-flow real estate, essential businesses, and precious metals (plus a measured BTC sleeve if it fits your view). In a reset, these aren’t just investments they’re claims on real value when IOUs are being repriced. ** This is not financial advice *