Q: Why do you think Singapore among many small countries keep building their national reserve, if the reserve are powerless against so many disasters?
Q: Why does the global insurance industry has grown over centuries, with ever wider coverage, and many policies lasting 50-100 years?
Q: Why do credit unions (and banks) even exist if long-term saving and lending is actually based on shaky ground?
Same Answer: The reality is , the world will not end in 100 years, so the consistent savers do build up /formidable/ resources.

We tend to exaggerate the likelihood of various headline disasters, and then reach un-calibrated, quick, sweeping conclusions that “financial protections are often close to useless”. Such protections including

1. gold,
2. insurance plans
3. government health insurance
4. bank deposits in a resilient currency

Financial protections can be more reliable than other protections like levees, military protection, self-defense…. See also reliable shield: burnRate^wellness habits. There are rather few disasters that financial protection can’t help at all.

1. political upheavals [looting, revolutions] that seize assets of private families. This happened to my father’s family and my mother’s family, but I won’t say financial protections were completely useless. It also happened in Cambodia (Grandpa pointed out) and perhaps Eastern Europe. I discussed this with grandpa. He said this will not happen again in China.
   • rare: armed conflicts — somewhere in your country is still “manageable”, but if it hits your city, then I hope money can buy you some travel tickets or weapons. Such things never happen out of the blue, so you have years to prepare.
   • Defining feature: anarchy including government-sanctioned anarchy
2. hospital overrun — at national level can still be manageable, but if your city hits hospital capacity and somehow you can’t seek treatment in another city, then money can’t help. I think this happened in Wuhan, Span, Italy, NYC. Thanks to lessons from covid19, this is less likely to happen.
3. ==== For below items , financial reserve can provide partial /relief/ or at least buy some precious time
4. stock market boom and bust, wiping out a big chunk of your wealth. One of the most frequent disasters.
5. government financial reform hurts my cohort. I am confident that in well-managed systems like SG or U.S. we would be given sufficient advance notice/warning.
6. burglary .. nowadays most people keep bulk of assets offsite.
7. — For the items below, the threats appear to be approaching from a distance. The financial cushions you built can buy you some time + some real benefits relative to the unprotected larger population.
8. rare: high inflation more than 50% a year
9. severe currency devaluation short of hyper inflation .. imported inflation
10. very rare: famine — hitting somewhere in your country is still “manageable”, but if famine hits your city then money can’t help. Luckily such things always develop over decades , never suddenly like a pandemic, so your money can help you prepare. Other rare natural disasters include earth-quake, tsunami, but they affect fewer people.
11. population aging leading to ever more people drawing from (rather than contributing to) a dwindling pool
12. peak oil
13. global warming and sea level rise; climate change and desertification.
    • Note sudden global-scale natural disasters including cosmic collisions happen only in sci-fi.
14. global protein shortage but short of famine

— “Black swan” the concept .. Most writers use this term for _financial_ events. By strict definition, black swan events are so rare and unpredictable that assessing the probability will be guesswork and not based on data.

Is it simply better to put aside this theory? Well, one can study the pattern of past black-swan events and try to learn something, but I don’t know how useful that is, given that predicting similar events are by definition nearly impossible. I find it fun to read history. It doesn’t always offer any actionable insights though.

SG economy has experienced many large shocks. (These shocks could be considered white swans.) I feel the PAP leaders understand the vulnerability inherent in this system. They try to turn the vulnerability into agility.