Hedge fund managers often like to opine on various topics that are largely unrelated to investing.
It’s the danger posed by an electromagnetic pulse.
Singer writes that an electromagnetic pulse is the, “risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence.”
According to Singer, threats that are more manageable than an electromagnetic pulse include nuclear war and asteroids.
From Singer’s letter:
“The risks associated with electromagnetic pulse, or EMP, represent another story entirely. It can occur naturally, from solar storms that send ‘coronal mass ejections,’ which are massive energetic bursts of solar wind, tens of millions of miles in a mere few hours. Or it can be artificial, produced by a high-altitude (at least 15 miles) explosion of relatively low-yield (even Hiroshima-strength) nuclear weapons.”
Singer references an 1859 solar disturbance, known as the “Carrington Event,” that disrupted the telegraph network, and says that just two years ago, “the sun let loose with a Carrington-magnitude burst, but the position of the earth at the time prevented the burst from hitting it. The chances of additional events of such magnitude may be far greater than most people think.”
Singer says an artificial EMP attack would have consequences more severe than a solar storm, but notes that there is no way to stop a naturally occurring EMP.
These two ways for an EMP to disrupt the electrical grid make the dangers of such an event “very real.”
Singer concludes by writing:
“What can be done about this risk? Critical elements of the power grid and essential electronic devices can be hardened. Spare parts can be stockpiled for other, less critical hardware. Procedures can be developed as part of emergency preparedness so that the relevant government agencies and emergency response NGOs are ready to respond quickly and effectively to an episode large or small. Why are we writing about EMP? Because in any analysis of societal risk, EMP stands all by itself.”
In introducing his concern over EMPs, Singer notes that his letters, “are typically overflowing with scary or depressing scenarios,” and while there is certainly a tinfoil-hat-wearing conspiratorial bent lurking within Singer’s discussion, his concerns should not be overlooked.
In his letter, Singer also talks about dangers facing the global economy, hidden inflation, and his current battle with Argentina, among other topics.