Hard Currency

The euro convergence trade in 2000-2002 when I was working as an Italian equity stockbroker in Milan served us and many investors well. Will there be a reversal, divergence trade to play in 2012? I've been asking myself as I rifle through the residual banknotes from travels over the last few weeks: the Lithuanian Litas, Danish Krone, the Swiss Franc, not to mention Sterling. The euro's ten-year anniversary has gone almost completely unremarked. And is it such a surprise? Aside from Europe's sovereign debt crisis, it's difficult to get passionate about this currency. The Franc, the Kronor, the Pound, dare I say it even the Litas have the look and feel of real money, with meaningful historic associations, and the look and feel of something with intrinsic value (certainly when you feel the heft of a pound coin, CHF5 or DKr20 in your hand...).

What's your favourite currency, paper money or coins?

And what to do with your hard earned currency in difficult times is the other question? How to preserve any capital that hasn't already been ravaged by the dislocation in markets over the last few years? Flo and I both have an occasionally apocalyptic mindset, so arable land and water supply would seem to be the ultimate assets to own (seems you need about 2 acres for a family of four to be self-sufficient... plenty of glacial meltwater in the Alps!). That's not very practical in central London, however.


Still it's fair to say you that in the current environment you want to be looking at investing in real, productive assets. Our purchase of a flat in Percy Circus, in an area of London you might call upper Clerkenwell or lower King's Cross, was a big milestone for us in 2011. It's in a building next to where Lenin lived in 1905 before he went to foment revolution in Russia. We're optimistic about the development going on around King's Cross - new Central St. Martin's campus, total revamp of the station, St. Pancras chambers, Gagosian, etc. And Foxton's has been helpful in boosting the yield by failing to reflect 5m2 of interior space that's clearly indicated in the original title deed. It's now renting, so if you know any professional types that would be interested in a one bedroom in the area let us know!

Separately, I am encouraging Flo to invest in one (or more) of her many excellent business ideas. I may be partial, but I'm convinced she's a serial entrepreneur with excellent timing (she and her former business partner closed the sale of their trade fair show Bubble on 15th September 2008). Now is the time to launch a business: interest rates are low, overheads are low, and there are many able people looking for work.

Those of you who agree, you are welcome to chime in on my behalf to help persuade her!