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My Gurus: Adam Posen & Peter Zeihan

I met Adam Posen in 2005, at an event sponsored by the Bank of England where he was an advisor.  He was particularly "un-American" in his analysis of the world, it's not that he was not an American, he was, but rather that he was able to put himself in the shoes of those who he analyzed.

It was a speech by Adam that made me take a real look at my future in the City.  My sector (wealth managers) was going to be largely moved to Europe, but the rose-tinted investors were all taking the view that everything would be fine.  In a nutshell, I was able to sell my participation in our business for a substantial sum of money.  

My wife is almost as old as I am and could see the writing on the wall.  Once you hit 50, your future as a partner in a law firm is questionable, especially if you are not a rainmaker.  The decision was challenging but almost made itself for us.  Top "dollars" for our house and investments!

Zeihan, another American is far more contentious and is not an economist.  He's really from my type of shop providing guidance to clients on asset allocation (which is how I got to "know" him).  He wrote several sensationalist books, that made some rather bold predictions.  Unfortunately, many of his prognostications occurred, and the most sensationalist was that Russia would invade Ukraine in the first quarter of 2022 (he wrote that book in 2018).

Two other Zeihan's prognostications are of immediate concern to anyone living in the UK, first as Europe's largest sea power, the United Kingdom has more options than most. Secondly, a future war between Ukraine and Russia would have a massive impact on the availability and cost of energy in Europe, Germany was 80% dependent on Russian gas.  

For a long time, the UK's energy requirements were met with European imports, but over the past five years, the UK has shifted away from Europe to the US.  We had already built our biodigesters when Russia invaded Ukraine in 2022.  In October 2021, we filled our LPG tanks with very cheap gas not only were prices low, but as farmers we received priority.  We knew that by the autumn of 2022, our biodigesters would come online, so when LPG prices spiked to 10x their historical levels we were not buyers.  We actually sold a tank full of LPG, because the tanks needed to be completely free of LPG before we could add compressed methane.

Britain's exit from Europe will accelerate the trade decline between the two.  British farmers' ability to produce fruits and vegetables year-round will reduce the impact of more difficult trade relations with our European cousins.  We suspect that other farmers will consider high tunnels like us

Posen forced us to reconsider our future in London, and Zeihan provided an understanding of future demand and supply issues in the food sector.






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