Vulnerability of international travel
There seem to be quite some PP members who travel regularly or who live outside of their home country, so I suppose that the issue of vulnerability of (inter)national travel services would be relevant to several here at PP. I’m currently on assignment in Ethiopia, and with the turmoil in the (financial) markets I’m happy to see the return date to Sweden nearing. If the banking system would ‘freeze’, flight companies would not be able to pay for fuel and critical services, and I suppose they would stop operating almost instantly. Being stuck in a city in Africa would seem to be one of the worst situations to find yourself in in case of a systemic melt-down. As a large part of my income depends on assignments that involve international travel (and I’m negotiating another assignment in Ethiopia for in a month), I’d be interested to hear some thoughts on the risks with regard to this.
Being ignorant on finance and economy it would seem that volatility in markets would be one thing. For the banking system to completely freeze up, that would be another, and I suppose it would need quite a large pin, and that seems to be the end of a chain of reactions. Looking at PP and ZH, there are quite some pins floating around that could ‘pop’ a bubble. Would these bubbles be enough to knock out the banking system though?
I have several questions (sorry if some of these would seem ignorant):
- What would the risk of a complete banking system seizure be? What progression would lead to this, what could the triggers be?
- Would we be able to see it coming in time? What would the indicators be that this is imminent (if it is possible to have indicators for black swan events…)
- Would the banking sector be able to gain some level of operationality again within reasonable time (some days), any longer and the supermarkets would also be empty…
- Are you aware of any contingency measures in the flight industry to cope with a scenario like this?
- Am I missing anything in this story (e.g. other risks linked to international travel that are not linked to the banking sector)
These are difficult questions, to which there are no clear-cut answers, but any informed thoughts around these would be very much appreciated.
I'll put this here because it is tangentially relevant.
There are going to be a lot of decisions to be made. Discretionary travel is one. I have my yacht, and want a recumbent bicycle.
Space travel becomes a matter of survival. We have 10 years to get really good at it.
One man, hydrogen powered sub orbitals may suddenly make a lot of sense. (Of cause they don't make sense now.! I'm not silly.)
Spending a lot of my time in out of the way places (mostly Brazil and Indonesia these days but Africa is on tap..) I have given this some thought. I have the same questions as you and would welcome input from anyone with real information though. My current thinking:
1. Plan A: If the world looks to be going to hell, change flights and head back home ASAP. Things don't seem to have frozen up in 2008-9 and my hope is that there would be a few days at least before international flights might seize completely for already ticketed passengers. Risk – you might get stuck somewhere in transit…
2. Plan B: Head for your nearest consulate/embassy. The hope being that they will be helping their countrymen out of the country and back home. The risk being dying of old age in the bureaucratic system before anything actually happens. If absolute chaos ensues I'd expect our out of the way government organization to be conveniently forgotten.
3. Plan C: Weather in place. Hunkering down for a few days or even weeks should be possible. Developing countries probably will function better than developed countries in a banking system collapse since they aren't quite so graced will fully functioning systems anyway. This does nothing for worry about our families though. The idea here is that some modicum of a functioning international travel system should be re-established again in the not too distant future. Risk is that this doesn't happen in a timely enough manner to keep you fed and sheltered and your family safe at home.
4. Plan D. The end of the world. Get creative and fight my way home in any way possible (plane, ship, camel…) or die trying.
For what it is worth.
I've thought about this issue quite a bit; fortunately I have an employer of the same mindset.
I go to China four times a year or so. My position, which is accepted by my company, is that I get a veto on travel, i.e., I want to do what we at the firm need to get done, but each instance of international travel is an "ask", not a "tell", to me. I realize that not everybody (most) employees get this option; I am very fortunate in being with a small, family run company that "gets it". On the other hand, last time I went job shopping, big "corps" that treat their people like freaking disposable sheepslaveassets were not even something I'd consider. Rather sell crack on the corner and take my chances with the law, than take that sort of job.
Typical participants on this website are going to pick up on "early warning" signs before most…umm…sheep. I am not an exception to this observation. I have an understanding with my guys, as a precondition for international jobs, that if anything happens that I seriously don't like (a Lehman day would qualify, so would a Turkish invasion of Syria, so would a shootdown in the Spratleys), I am hopping the first plane to anywhere-that-speaks-english immediately, at their expense, and nobody is going to care if it is the pleasure-palace suite on the flagship Emirates Airline scarebus. I would do this anyway, even if it was on my own dime. I wouldn't take that call lightly, but I think there is an excellent chance that I could "call the ball" a few days before major impacts started happening that would affect the behavior of the Kustoms Kops or the airlines.
I also am fortunate to have an employer, also a business partner, that both understand today's fragility, and will text me a "get out" message…at which point I would without hesitation drop my job and hop in a cab directly.
I always keep a sizeable amount of the local cash with me. I also have a notion to buy the PRC's legal maximum of gold (40g) in gold jewelry form, despite the crappy premium, as a "wearable" through Customs. They don't take kindly to bullion transport from in-country, but I've purchased Chinese jewelry and brought it out before with no problems.
Specific to the questions…and I'd love to hear from others their thoughts as well:
- What would the risk of a complete banking system seizure be? I think it is inevitable but the timing is impossible to predict. What progression would lead to this, what could the triggers be? Remember that several months elapsed between the archduke taking a bullet, and the outbreak of war. Possible events, I look at history. Major assassinations, false flag operations going sideways and being revealed, ground invasions prompted by psychotic assholes, even on a different continent, and oil tanker getting sunk by a Silkworm because some Iranian gunboat crewman is on meth…it is not predictable, but I think we'll know it when we see it.
- Would we be able to see it coming in time? What would the indicators be that this is imminent (if it is possible to have indicators for black swan events…) Maybe see it in time. I think we have much better odds of catching it as it is unfolding, because we are expecting it, watching for it, and are smart enough to recognize it. For the second part, the second trade embargoes go up that get enforced with guns, anywhere, I'd be coming home. Wars start when trade stop. Bye-the-bye, I think we are seeing "imminent" signs all over the place, this 1st quarter of 2016.
- Would the banking sector be able to gain some level of operationality again within reasonable time (some days), any longer and the supermarkets would also be empty.No. I don't thinks so. I think there is a real good chance it will be a total soup sandwich for weeks..
- Are you aware of any contingency measures in the flight industry to cope with a scenario like this? I really have no faith in those idiots. Don't think so. Planning for outliers would be unlike them.
- Am I missing anything in this story (e.g. other risks linked to international travel that are not linked to the banking sector) We are all missing some part of the story, that is why discussions like this can be so valuable. I can tell you, that a "Gary Powers" type of shootdown event over the Spratleys would have me super-concerned if I was anywhere in Asia. There will be a banking crisis someday, there are in my mind decent odds that it will be precipitated by some sort of conflict escalation.