Hang on a minute, we are not there yet. However, I’m in the business of planning ahead, aren’t I? So here we go, where would it be best to place your dimes and nickels if, God forbids, war comes to your shore?
Well, spoliation risk is what comes to mind first. You don’t want to end up like these Canadian truckers who, rightly or wrongly, got de-platformed from their banks from taking the wrong side of mainstream. In times of war, anything that could be seized is probably not a safe bet.
Property in the beautiful city of Kiev is not ideal, and you should rather look at the providential safe havens. For a long time, investors in less stable countries favoured London as one of the destinations. With party-happy Boris at the helm, it may be more or less compelling. The US, the land of the free, has the bedrock of USD as one of its key attraction factors, only if you play by the US rules, a proposal that had become less convincing over the years.
Liquid securities such as stocks and bonds would have this great advantage of being able to be sold off quickly to recoup some cash, however they’ll be the first to crater due to increased uncertainty. Markets are quick to price Armageddon these days, even if the reality suggests differently. As you know now, liquid assets are sold on the war rumour, not on the news. Most likely is that you won’t have much incentive to take your loss as the market dips.
Jewellery and art are another option, although slightly cumbersome to carry around, unless you hold your art in NFT format. For the latter, you’d better choose wisely between cryptopunks, BAYC, and Azukis, or rather a fractionalized version of it.
That brings us to the elephant in the room. What are the assets that can’t be spoliated away? That are censorship resistant? Remain liquid no matter what? Can be sent across the world in seconds? Yes you’re right, this is crypto again. There is no surprise that crypto adoption has already been strongest in emerging markets, where both political and economic instability is higher. Africa, South East Asia, Latin America are coming on top. Out of the top 20 countries ranked by crypto adoption, only 3 belonged to more developed economies according to Chainalysis in Oct21.
Physically stuck but asset free. Here is the dream that crypto delivers, and there is no surprise that people increasingly desire such added freedom.
360 Advisory – Markets