"Black Swan flight 10 is arriving at gate B5."

One of my friends works for United Arab Emirates Airlines and has been stranded in a European airport for the weekend because of the volcanic ash from Eyjafjallajokull. According to Eurocontrol about 80% of normal flights have been cancelled. This is a visual representation of the dark clouds looming over the global economy.

GROUNDED FLIGHTS

With the vast majority flights in Europe grounded there should be a noticeable effect on economic activity. The effects on tourism, collaboration and business will likely be long-lasting. This is an example of why individuals and businesses should work to minimize their risk to geographic location and discrimination.

Despite the obvious that you have to be somewhere; in my own situation I have largely completely eliminated the effect of geography on my own lifestyle and, to a large extent, my businesses and investments. Volcanos, hurricanes and earthquakes are not the main risk I desire to minimize but instead geographic discrimination like what recently happened in Colorado.

GEOGRAPHY AND YOUR HEALTH

Since you have to be somewhere, why not choose a physical location that is good for your health? As opposed to coloured coupons like Icelandic kronars or FRN$s, physical commodities such as wheat, corn, oil, soybeans, water, etc. must also be somewhere. Many highly populated areas, like Linfen, China; Sukinda, India; La Oroya, Peru; Norilsk, Russia; Chernobyl, Ukraine; Tokyo; Mexico City; Los Angeles; Sao Paolo; and etc., are extremely polluted and prolonged exposure to the pollutants can be hazardous to your health. Additionally, some of the inhabitants may actively be your liability.

Can you image breathing that ash? Can it possibly be good for your health?

EYJAFJALLAJOKULL, KATLA AND FAMINE

Oftentimes when Eyjafjallajokull erupts the other much more volatile and powerful volcano Katla also flares up. Oftentimes it seems that natural phenomenon seem to coincide with social, political and economic factors and the overall effects are exacerbated. When it rains it pours. For example, as The Guardian observed:

The Laki volcanic fissure in southern Iceland erupted over an eight-month period from 8 June 1783 to February 1784, spewing lava and poisonous gases that devastated the island's agriculture, killing much of the livestock.

It is estimated that perhaps a quarter of Iceland's population died through the ensuing famine. ... Across the Atlantic, Benjamin Franklin wrote of "a constant fog over all Europe, and a great part of North America".

What was happening during this time frame? Well, France was engaged in wars and running large government deficits. What do government deficits lead to? Taxation through inflation.

It was no different in France. For example, as Olwen Hufton observed in Women And The Limits Of Citizenship on page 25, the Society of Revolutionary Republican Women was particularly interested in "combating hoarding [of grain and other staples] and inflation."

And what does inflation lead to? Price controls.

It was no different in France. For example, as Robert Scheuttinger observed in Forty Centuries Of Wage And Price Controls on page 45, The Committee of Public Safety first attempted to set the price for only a limited number of grain products but, by September of 1793, it expanded the "maximum" to cover all foodstuffs and a long list of other goods.

And what do price controls lead to? Shortages and rationing.

It was no different in France. We all know, or should know, the story. Louis XVI, Marie Antionette and others of the distant central government were insensitive to the plight of the middle class and poor who were suffering from disease, pestilence and starvation which were largely an effect of the governmental interference by the ruling class.

And what do shortages lead to? If severe enough then starvation and death.

It was no different in France. Marie even callously said, "Let them eat cake." When someone loses everything and has nothing else to lose then they often lose it. In this case, the French People lost it, heads rolled, leadership changed and the French Republic was born. The black swan of the French Revolution was completely predictable.

WHY HOARD

So it begs the question: Why did people hoard grains and other staples? Because they were safer and more liquid. They also hoarded gold and silver; taking their capital to geographical locations with less political risk. This series of events; government deficits, inflation, price controls, shortages, starvation and death, have played out, at some point in time, in every populated geographic location on earth. Since you have to be somewhere; why be in these geographical locations during those times?

CONCLUSION

In the next few months I was planning on taking a trip to Europe. This trip may have to be canceled if Eyjafjallajokull or Katla keep burping. I am fortunate enough to choose where to be at what times.

Iceland has already experienced the collapse of their banking system and currency. There has been civil unrest in Iceland. I bet many Icelanders wish they had a life hedge.

I do wonder what effects these volcanic eruptions might have on Europe's food production over the next few years? With floods in the Midwest, droughts in South America and Australia, desertification in China and tremendous inflation taking place through quantitative easing to fund government deficits for bailing out failed financial institutions;

I wonder what effect there will be on the worldwide food production and distribution system. So beware Goldman Sachs; you never know when those black swans will fly in and the current flight 10 landing at gate B5 is just a minor distraction from the real issue.

DISCLOSURES: Long physical gold, silver and platinum with no interest in GS, the problematic SLV, gold ETF or the platinum ETFs.