Do you ever think about the scene from Terminator where there are children playing on swings and then suddenly a bunch of ICBMs launch from their mid-west holes and the world ends? Well it’s all I’ve been thinking about recently. I was already freaked out by Russian sabre rattling and the potential break-up of the euro, and now after the US election I’m getting close to an apocalyptic mind set.
What is concerning me is that in a nuclear war, the correlation of all assets would converge, whether it’s London property or Gold or shares or whatever, except what they would converge to would be 0 rather than 1. (I don’t apologise, that’s probably the funniest portfolio optimisation joke there is). I have had some debates with goldbugs about this because of course they think that would be valuable in a war, but if you think about it for more than a couple of seconds you realise that first of all, gold is too valuable to pay for most things and second of all you need to be able to protect it.
I have some friends who are real Preppers, the type of people who instead of yachts buy farmland in Wyoming, and the assure me that the two most valuable things in a post nuclear world will be diesel oil and 50gram bottles of vodka, and they are stocking up on both. The vodka is valuable because it’s a very handy, bribe sized object to give to a roaming band of soldiers, while Diesel will become more and more valuable while everything else is depreciating.
Anyway, the point of this post is not to depress everyone but rather to market my solution, the ultimate hedge if you will. At the first nuclear exchange, or even if the Italian banking system melts down next week and takes us all with it, London will become completely uninhabitable as soon as Waitrose runs out of papayas and Fortnum’s runs out of Darjeeling.
Over the years I’ve been keeping an eye on the sale of surplus nuclear proof bunkers in Sweden. From time to time the government will sell these to the highest bidder, and the country is riddled with abandoned cold-war era installations with water, electricity and everything. I’ve recently secured an option on one of these, and I’m refurbishing it to accommodate ten families for five years in reasonable comfort. For the very reasonable deposit of USD, my family rescue package includes a pickup by yacht from the port of your choice in the UK, transport to Sweden and 5 years room and board on basic rations.
Unfortunately, while the business plan above would have worked it I had managed to secure 3 deposits, I haven’t been getting a lot of traction and so I have fallen back on the venerable city tradition of the up-sell with a premium package. You see, I realised that the closest local town to the bunker was a famous university town in Sweden and so I’ve designed a better package. This is called the Premium rescue package and includes a better armed boat pickup, better food and a couple of pallets of Dom Perignon to while away the years. Most importantly, you may have noticed from the name that it doesn’t include the family option, instead, on the way to the bunker the armed convoy will swing by the University town and offer asylum in the bunker to two companions of your choice, and believe me, they will be very grateful!
Now this package is getting traction, a snip at USD 7m, and it comes with this marketing snippet: “ You made all the money in the world, and now the world is ending. Don’t you feel like a fool? And isn’t it time you did something for yourself?”
