Investing for the apocalypse
If you can't afford a bolthole in New Zealand, never fear, says Merryn Somerset Webb. There are more profitable ways to prepare for the future.
The great British vegetable shortage filled the papers last weekend. Asda was reportedly limiting bulk purchases of broccoli, cabbage and courgettes. Tesco introduced a three-lettuce limit Morrisons opted for two. Pret a Manger changed ingredients in its salad boxes. And UK-wide, wholesalers raised the prices of vegetables by 40% (green beans) to 200% (tomatoes). Our own greengrocer told me that the last box of aubergines he had managed to get was £29. He was selling them on at cost.
This is not, as some of my neighbours seem to think, anything to do with Brexit. It is simply due to some nasty weather in Murcia (southeast Spain), from where the UK sources most of its winter vegetables. It is a consequence of the fact that the UK, despite decades of agricultural subsidisation, imports 40%-plus of its food via a complex global supply chain that is hostage to economic and environmental change. In 1991, it was only 25%.
The courgette crisis of 2017 is no big deal everyone loves UK-grown cabbage, right? But it is a nice reminder that modern nations aren't ever that far from crisis. The world's super-rich clearly recognise this. The other big story this week has been the news that the uber-rich are preparing for a hell of a lot more than a lettuce limit.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
They are buying self-sufficient boltholes in New Zealand (or Wisconsin if they haven't a long-haul-capable private jet), in case of economic or social meltdown. Their main requirements, according to The New Yorker? Their own water and power supplies, and the ability to produce their own food. So Peter Thiel of Paypal owns an estate on Lake Wanaka, as do various hedge-fund gurus and inexplicably rich Russians. "Serious enquiries" from Americans, one estate agent told The Times, have tripled since Donald Trump's election.
It isn't just New Zealand; Mel Gibson has his own island in Fiji and Larry Ellison has bought 98% of Lanai (Hawaii's sixth-largest island). The preparation for social meltdown isn't just about land either; one tech entrepreneur told The New Yorker that he had had laser surgery on his eyes because prescription glasses could be hard to find when the apocalypse comes.
I know what you're thinking. Having too much money must have gone to their heads. But it isn't really so. We are pretty optimistic at MoneyWeek. But we also know that post-financial-crisis monetary policy has created horrible financial and social distortions in the West; that surveys show majorities almost everywhere think their "country is going in the wrong direction"; and that all political and financial systems are fragile. So why not put in place a little insurance just in case? We can't quite afford estates in New Zealand (yet), but we can afford properly diversified portfolios, a little in the way of real assets, and a few pockets-full of gold.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).
After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times
Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.
Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.
-
Investors pull money from UK equities as government warns of “painful” Budget
The government’s post-election honeymoon period has been short-lived, and investors are shying away from UK equities as a result
By Katie Williams Published
-
Top global fintech companies to invest in
One British fintech hogs the headlines, but there are two top performers in the US. We explain where you should put your money
By David C. Stevenson Published
-
Beat the cost of living crisis – go on holiday
Editor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
By Merryn Somerset Webb Published
-
How capitalism has been undermined by poor governance
Editor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
By Andrew Van Sickle Published
-
Don't be scared by economic forecasting
Editor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
By Andrew Van Sickle Published
-
The biggest change in the last 17 years – the death of the “Greenspan put”
Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
By John Stepek Published
-
The wolf returns to the eurozone’s door
Editor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
By Andrew Van Sickle Published
-
Things won't just return to normal – that's not how inflation works
Editor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
By John Stepek Published
-
Car hire and the strangeness of the post-pandemic economy
Editor's letter A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.
By Merryn Somerset Webb Published
-
Why we need to get a grip on our government
Editor's letter Our government is trying to do too much, enacting policies that are destructive to the private sector. It needs to drop the the feel-good nonsense and create policies that lead to long-term wealth, says Merryn Somerset Webb.
By Merryn Somerset Webb Published