Apocalypse, and the demand for money

Here's the solution to the so-called pensions crisis:

Scientists are monitoring the progress of a 390-metre wide asteroid discovered last year that is potentially on a collision course with the planet, and are imploring governments to decide on a strategy for dealing with it. It's called Apophis. It's 390m wide. And it could hit Earth in 31 years time...Nasa has estimated that an impact from Apophis, which has an outside chance of hitting the Earth in 2036, would release more than 100,000 times the energy released in the nuclear blast over Hiroshima.

Although this solves the pensions "crisis", it raises another problem.
To see it, imagine we knew for sure that Apophis would hit earth on, say, July 20 2036. This means that on July 19 no-one would want to hold money - coz you can't take it with you. Money would be worthless. The converse of this is that (some) goods and services would be infinitely valuable.
Now, if money will be worthless on July 19, no-one will accept it on July 18. So it will be worthless then. And on July 17.
Simple backward iteration means money should be worthless now.
The prospect of the end of the world should therefore cause hyper-inflation today.
So why doesn't it? It's because there is a transactions demand for money which exists even if money loses its function as a store of value.
But is this motive really strong enough to entirely repress now the hyper-inflation that's inevitable in 2036?
One of the interesting aspects of the end of the world is the light it sheds upon demand for money functions.

Comments

[Chris Williams]

There's an interesting take on a variation of this in one episode within Iain M Banks's _Consider Phelbas_, where Our Hero has to get off a space habitat which is scheduled for demolition. Inflation happens.

Also, in real life, 2039 is plenty far enough away to put some serious earth to orbit infrastructure in place: probably enough to get half a million off, though only a proportion of those would have a hope of even medium-term survival. Who'll build the elevator if they don't think they can ride it, though?

[Paddy Carter]

"One of the interesting aspects of the end of the world is the light it sheds upon demand for money functions"

have you written a better sentence?

[Lee]

Economists! You ignore entirely that the total destruction of the Earth will hit women and minorities hardest.

[dearieme]

Perhaps it's equipped with 72 virgins?

[Simstim]

I already thought that the pensions crisis and the end of the world were linked. However, I had plumped for ecological mega-disasters and/or resource crunches rather than large lumps of rock hurtling through space.

[etan]

Why do you think gold and commodity prices are rising?

[chris]

Asymmetrical information? Most people do not think 30 years in advance, personally I don't normally think 30 days in advance, so cannot connect with that some of their money (the money they do not spend before everyone else realises the world is going to end) could be worthless.