Investing in catastrophe

Apocalypse looms: Where should I put my money?

Published June 28, 2006 6:15PM (EDT)

You won't find a bleaker view of the future in a report by an investment fund than the one outlined in "Investment Implications of an Abrupt Climate Change," from the Canadian firm Sprott Asset Management. War, famine, flood and, worst of all, hyperinflation, are on the way.

And while "It is undoubtedly callous to discuss the investment opportunities that an abrupt climate change will spawn, considering the unspeakable horrors that life on our planet is facing," prudence still requires that investors prepare. According to Sprott, that means putting your money on uranium (because nuclear power is the only feasible answer to our energy needs in a carbon-constrained future), gold (because the world's currencies are going to lose their grip as governments start spending like crazy to mitigate the impact of climate change) and coal (particularly technologies for reducing emissions generated by the use of coal).

The tip to read the 56-page report, which mostly rehashes information that anyone who follows climate change news already knows, came from Treehugger, a blog with a prodigious capacity for posting environment-related news. We love Treehugger at How the World Works, especially for all the cool photos of environmentally friendly products. But a study like Sprott's could use some context.

From press coverage included at Sprott's own Web site, one learns that Eric Sprott is a notorious investment horseman of the apocalypse. Doom and gloom are his calling cards. Not only has he been beating the climate change bandwagon, but he also is a peak oil fan. And he and his principal employees seem to lean a little toward the conspiracy side. Two other reports touted on the company Web site argue that there has been sustained interference in the U.S. stock market by the United States government and that gold prices have also been manipulated from behind the scenes for decades.

There are obvious intersecting points between peak oil and climate change -- not the least of which is that rising oil prices make coal ever more attractive, which will in turn put even more pressure on the climate. And maybe Sprott et al. are correct about stock market and gold manipulation. But taken all together, the whole enterprise has a kind of pump-and-dump feel about it. Disaster's coming, so everybody better buy uranium, because, according to Sprott, nuclear power is the future. Of course, if everyone does buy uranium, that's very good for Sprott, whose hedge funds are into uranium.

Maybe I'm overestimating the potential impact of a report like Sprott's on overall market flows. And certainly I agree that rocky times are likely ahead, and those with the money to do so should plan accordingly, and prudently. But the main thrust of the Sprott report is to push nuclear power, and the verdict on whether that option is really prudent still isn't in.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Environment Global Warming Globalization How The World Works Nuclear Power Peak Oil