At the recent meeting of the global élite in Davos, Switzerland, Robert Johnson — a former hedge fund director who heads the Institute of New Economic Thinking — told the assembled glitterati that he knows “hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway.” He added that “very powerful people are telling us they’re scared” because they “see increasing evidence of social instability and violence.”
Perhaps some of the hedge fund managers on the Sovereign Investor Daily mailing list are heeding our regular warnings about the need to prepare for a financial crisis or a complete social collapse.
But Johnson isn’t referring to your average financier. He’s talking about the sort of people buying $3 million luxury survival condos in an underground decommissioned missile silo in Kansas, complete with 16,000-pound nuclear bomb-proof doors and sophisticated water and air-treatment facilities…
Stop the World, I Want to Get Off
Robert Johnson isn’t the only big-wig to note the apocalyptic mood amongst the super-wealthy.
Stewart Wallis of the New Economics Foundation told CNBC that “If they can get off, onto another planet, some of them would.” And while they wait for interplanetary travel options to emerge, 1% types are “shelling out millions to protect their loved ones from intruders, natural disasters or the apocalypse … families could survive in the best planned of these luxurious strongholds for up to three generations.”
Why the high-end prepper panic? Well, as Tyler Durden of Zero Hedge, one of my favorite market analysts, puts it: the super-rich “can see that millions of people are falling out of the middle class. They can see that society is breaking down in thousands of different ways. They can see that anger and frustration are rising to unprecedented levels. And they can see that things are likely to boil over once the next major economic crisis strikes.” Greece, anyone?
I see it too. I used to work in the world’s poorest cities, where informal slums of cardboard and scrap wood and metal house millions. Now I see them here in the U.S. For example, over the last two years, the number of permanent street encampments in Los Angeles has increased 60%. Once the people living in such places accept that this way of life is the norm, their commitment to the unwritten social contract that keeps society stable will evaporate.
Taking the Long View
Much of our day-to-day existence revolves around the hard work of ensuring that we earn and retain enough wealth to live decently now and into the future. We look for opportunities for yield where we can find them, and hedge against other misfortunes such as inflation and wealth confiscation as best we can.
But I am convinced — like the hedge fund managers aiming for New Zealand — that everyone also needs to hedge against an unsustainable socio-economic order.
Unlike the high-end doomsday-preppers at Davos, however, I don’t see this happening all at once, as in a silly sci-fi movie like “2012.” It won’t involve last-minute flights out of riot-torn cities with desperate plebs hanging onto the landing gear. Instead, it will happen slowly … one city, country, or region at a time.
It’s already started, as anyone who’s visited a Rust Belt city lately — or Greece — can attest.
Seeing economic and social collapse as a long-term process means you don’t need remote farms with personal airstrips and Gulfstream jets with their engines warmed up to ensure your future. In any case, if things ever go so bad that such items became necessary, it’s not clear that even the remotest bolt-hole would be safe.
A Simple Solution
A more reasonable and actionable approach is to do what I’ve done … maintain a personal “file” on various places in the world to which I might relocate if I felt the time was right.
Of course, just having that information isn’t enough. You also need to act on it ahead of time, so that your “escape route” is in place when the time comes. That could involve obtaining a second passport, permanent residence, and/or property in a place that would not only welcome you and keep you safe, but respect your personal and financial rights.
None of this need involve Lear Jets and underground bunkers. Securing a safe retreat can be done quietly, securely, and with the confidence that comes with knowing it’s there whenever you might need it.
Offshore and Asset Protection Editor