In search of financial safe havens

While the financial crisis marches on, and investors frantically seek out safe havens for their money, it is worth asking what a ‘safe haven’ would look like.

This quote currently doing the rounds gives a clue:

“I’ve never been a ‘job creator’. I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate

“That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.”
So,
A safe haven is not a static asset. It is not gold, not oil, not dollars or francs or government bonds.

A safe haven is a healthy, vibrant, dynamic system. A to-ing and fro-ing of value that is not locked up in just 1% of the population but flows backwards and forwards between the different entities. (GDP, after all, is a measure of how much money *changes hands* each year.)

A safe haven investment is an organisation or system that can be relied on to still be exchanging value in 10, 20, 30 years time.

People who want to build such an organisation would do well to realise that the system they need to create extends beyond the limited boundaries of the legal entity they call a business.

They might call this extended system a ‘permabusiness’.

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