Fighting the Crisis with Canned Ravioli7. September 2012 by Joachim Goldberg
In a column for the online edition of a popular financial publication, I recently told the tale of my friend K. He is a very forward-looking kind of person. Since years, he has anticipated the imminent break-up of the eurozone and the social unrest that would invariably follow. In preparation, he stuffed his home safe with gold coins and Swiss francs, and stocked his cellar with canned foods. It seems, however, the eurozone has taken a little longer to disintegrate than he had expected as much of his canned food has already reached the end of its shelf life. In order to avoid waste, he is now obliged to sit down to rather more tinned Ravioli dinners than he would like.
When I showed the article to a colleague, though, he bemoaned a certain schadenfreude in its undertone. The unrealised gains K has made with his gold and Swiss franc investments over the last few years, my colleague went on, almost certainly outweighs the loss he would incur even if he decided to throw away all of the canned food. K could easily afford to treat himself to more than a few slap-up meals. That’s right. All he would need to do is to sell a few gold coins or swap some of that foreign currency into euros and he could easily afford a five-course gourmet dinner at a three-star establishment. He could even invite me to go with him. However, he has never done it. The gold and the Swiss cash are intended for emergencies.
“You can’t just blow it on a night out,” insists K, “it doesn’t matter how high the price goes.”
“When will you sell your gold and your francs and realise those profits?” I asked my friend. This is the same question I would ask any other risk-averse citizen who had made similar preparations for the worst-case scenario of total economic and social breakdown.
“Only when the euro crisis is definitively over,” he replied. I did not dare ask how he would know when this point was reached. One thing is sure, though: when the moment came when one could say with absolute certainty the euro would not break up and the crisis was definitely behind us, gold and the Swiss franc would most probably have already lost a great deal of value. In such a world, nobody (nor their heirs) would need security in the form of precious metals or of foreign-issued cash. So K has a dilemma: take profits in the midst of the crisis or chow down on canned Ravioli. Bon appétit.