Are there any safe places?
During the Cold War the superpowers relied on a doctrine called “Mutually Assured Destruction,” or MAD. The idea was that neither party would initiate a nuclear first strike, because enough of the other side’s nuclear arsenal would survive to retaliate. The global devastation would be so complete that both sides would lose.
To average folks, the doctrine seemed “mad,” indeed. There was a low-grade fear surrounding everyday life. If someone irrational got hold of our nukes, or if there was some kind of international incident, it felt like our lives were at risk. Bleak movies about the aftermath of a nuclear holocaust, like “Threads,” were common. There seemed nowhere to hide.
One Canadian family decided to do something about it. William Curtis, from Mission, BC, did extensive research on places they could settle that would be safe in the event of a nuclear conflict. The family moved to Port Stanley, in the Falkland Islands – an isolated community far from strife and conflict. In 1981.
A few months later, Argentina invaded the Falklands, claiming sovereignty over the South Atlantic archipelago. The British decided to contest the claim, the result was the Falklands War, whose final battle took place just a few miles from the Curtis’s farm. Altogether, over a thousand soldiers and islanders died in the conflict – in a remote area with less than 2000 inhabitants. Looking back, the Curtis family would have been far safer if they had remained in British Columbia.
Map: Eric Gaba. Source: Wikipedia
Events can overtake the best-laid plans. It’s impossible to foresee all the possible developments. What seems reasonable can appear foolish, in hindsight. In 1981, almost no one expected that Argentina would invade the Falklands – what they called the Malvinas – Islands. And everyone was worried about nuclear war. But moving a whole family thousands of miles because of a risk everyone knows about and is trying to manage is an extreme action. And extreme actions often have unintended results. The best we can do is make reasoned decisions using the information we have at the time.
The same principle applies to managing money. There are ways to enhance safety or returns or liquidity or tax efficiency. But be wary of extreme measures. And expect the unexpected.
Douglas R. Tengdin, CFA