Merryn Somerset Webb
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.
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 (see our cover story), a little in the way of real assets, and a few pockets-full of gold.