We all sat around – no phones, no internet, and no idea whether we were making money or losing it on our open positions.
Aside from my time in Africa in the 80s, when blackouts were a regular part of life, the last time I lived through serious power cuts was in the UK during the miserable 1970s. Back then, there were few computers, no mobile phones, and no internet. We didn’t use carrier pigeons, but the city streets were full of briefcase-carrying messengers running from office to office and exchange to exchange.
Admittedly, in the 70s, far fewer people were involved in capital markets than today. Still, if you had an open position and no way of knowing what the markets were doing – and no way to reach your broker – all you could do was sit and hope things didn’t go badly wrong.
Monday’s electric grid failure in Spain and Portugal needs to serve as a warning. And whether or not you were affected this time, it should make you think seriously about what you’d do if it happens again.
At my off-grid property, I’ve got Starlink powered by solar panels – so I would have had internet. Unfortunately, the tank in my car wasn’t full enough to make the journey – classic sod’s law – so I didn’t go. (Though, if I’d had a Tesla, I’d have been completely screwed, so not all of Elon’s inventions are helpful in a blackout!).
Monday’s power cut took down the grid completely. In countries like Spain and Portugal – where a large share of electricity comes from renewable sources – power couldn’t be transmitted, meaning all those solar panels and wind farms were basically useless.
So now I’m asking myself: should I get another Starlink system for the office?
Luckily, I didn’t have much market exposure on Monday, so the potential losses were limited. But if it made me consider getting a standalone internet connection, then for anyone who relies heavily on being connected, it should be a no-brainer. Three 100-watt solar panels and a couple of batteries are a small price to pay for peace of mind.
I don’t know what this 8-hour outage cost Portugal and Spain, but I’m sure it wasn’t a small number. What it did do was deliver a clear message to anyone trading online – especially in digital assets like crypto. You can have a backup generator, but if there’s no internet, you may as well be back in the Stone Age.
One more thing worth mentioning: the importance of placing a stop when you open a position. Monday wasn’t a particularly volatile day – but it easily could have been.
The lesson here is simple. We can’t take electricity or internet for granted. We all know how much power crypto consumes. And we all know AI is going to increase demand much, much more. You can support renewables or not, but if the grid goes down – and little has been done to modernize these systems – we need alternatives ready.
Now, let me slip back into my usual cynical mindset for a second.
Is it just a coincidence that this massive blackout happened only five weeks after the EU advised us all to prepare a 72-hour emergency kit in case of a “power or telecommunications failure”?
I’m not trying to sound like a conspiracy theorist. I know many Americans already keep emergency supplies on hand because of weather-related events. But Europeans generally don’t – something that was made pretty clear on Monday, when shops began limiting water sales per customer and police had to step in at gas stations with generators to break up arguments.
Bottom line: We all understand the importance of doing research and having proper risk management in place before investing. But now, with power and telecom failures becoming real possibilities – as we saw in Spain and here in Portugal – we need to start preparing for a kind of risk we haven’t had to think about since before the internet.
The post And Just Like That, The Lights Went Out first appeared on JP Fund Services.
The post And Just Like That, The Lights Went Out appeared first on JP Fund Services.
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